Inheriting or receiving a gift from India as a Singapore resident

This is the reassuring one, and it is reassuring all the way through. On the Indian side, India has no inheritance tax and no gift tax, and the income-tax law exempts anything you receive under a will, by inheritance, or as a gift from a relative, under the proviso to Section 56(2)(x), so the Indian receipt is tax-free. On the Singapore side, the position is just as clean. Singapore abolished its estate duty for deaths from February 2008, and it has never had an inheritance tax or a gift tax, nor does it have any capital gains tax at all. So receiving an Indian inheritance is not a taxable event in Singapore, and there is nothing to report.

Singapore goes one step further than most countries, and it is worth appreciating. Individuals in Singapore are not taxed on foreign-source income. That has two useful consequences for an Indian inheritance. First, if you later sell the inherited Indian property, there is no Singapore capital gains tax on the gain, because Singapore has none. Second, the ongoing Indian rent or income the inherited asset produces, received by you as an individual in Singapore, is generally exempt too. So across the whole life of the inheritance, receipt, holding, and sale, Singapore takes nothing.

Because neither country taxes the inheritance, there is no tax planning to do and no double-tax worry, and there is certainly no need for a treaty, none exists between Singapore and India on inheritance and none is needed. What is left is purely practical, and it is all on the Indian end: getting the inherited asset properly into your name and the money out to you.

That is where a practising CA in India is useful. We handle the legal heir or succession documents so the Indian bank, registrar or sub-registrar will transfer the asset to you; we prepare a valuation of the Indian asset, which is handy to have on record even where no tax turns on it; we give you a certificate confirming that no Indian inheritance or estate tax is due, in case any Singapore bank or authority ever asks about the source of a large transfer; and we handle the repatriation of the inherited funds out of India to you through the permitted route, with the tax paperwork the bank requires. None of this is a tax you owe, it is simply the administration of getting a clean inheritance across the border, which is the one part of an otherwise tax-free situation that still needs doing properly.