Introduction
Legal framework


Introduction

By some estimates, the Indian diaspora is the largest in the world, with more than 30 million people of Indian origin living outside the country. Many of these people retain some connection with India through their nationality or ownership of assets, especially real estate. Consequently, global estate and succession planning invariably involves elements of Indian succession law. Indian succession rules are complex and multi-layered and may confound those who encounter international estates with an Indian connection.

This two-part series examines some of the fundamental concepts of Indian succession law and explains certain concepts which are unique to Indian law (eg, the Hindu undivided family). Part two also includes information that practitioners should seek from their India-linked clients to determine the legal framework applicable for devising a suitable estate and succession plan (for further details see "Unique complexities of Indian succession laws: part two").

Legal framework

Interplay of succession rules
In most common law countries, including India, succession to immovable property of a deceased is regulated by the law of the jurisdiction where the property is situated, irrespective of their nationality or domicile. On the other hand, succession to the moveable property of a deceased is regulated by the law of the country in which such person had their domicile at the time of their death. In some other countries, succession to moveable property is regulated by nationality.

Therefore, if any of these factors are satisfied, the succession to the estate of a person residing abroad may be governed by Indian law. However, the term 'Indian law' is a misnomer inasmuch as it suggests the uniformity or homogeneity of succession laws.

Succession laws in India are diverse and depend on:

  • the personal law of the deceased, which in turn is largely based on their religion; and
  • the nature of the assets.

Owing to the variety of religious affiliations of Indians (India recognises at least six major religions), determining the relevant succession regime can be more complicated in India than in other common law countries.

Within this broad regime, succession laws vary depending on whether succession is intestate or testamentary.

Intestate succession
'
Intestate succession' occurs when the deceased does not leave a will in respect of their assets.

As explained above, the rules of intestate succession vary based on the personal law applicable to the deceased, which is based on the deceased's religion. For Hindus, Jains, Buddhists and Sikhs, the rules set out in the Hindu Succession Act 1956 (HSA) apply. For Muslims, the law is uncodified and is based on principles of Sharia, which are further divided into rules applicable to various sects and subsects. For instance, rules applicable to Sunnis may differ from those applicable to Shias, and even among Shias, the rules applicable to Bohris may differ from those applicable to Cutchi Memons.

The Indian Succession Act 1925 (ISA) applies to both Christians and Parsis – however, the relevant rules for Christians are contained in Chapter II of Part V, whereas the relevant rules for Parsis are contained in Chapter III of Part V.

The below table sets out an example of how inheritance varies. It compares the legal heirs of a person passing away intestate with surviving parents and a spouse but no children or siblings, according to their religion at the time of demise.

Religion of deceased

Heirs if deceased is male

Heirs if deceased is female

  • Hinduism
  • Jainism
  • Buddhism
  • Sikhism
  • Mother
  • Wife
  • Husband
  • Islam (Sunni)
  • Father
  • Mother
  • Wife
  • Father
  • Mother
  • Husband
  • Christianity
  • Father
  • Wife
  • Father
  • Husband
  • Zoroastrianism (Parsi)
  • Father
  • Mother
  • Wife
  • Father
  • Mother
  • Husband

Testamentary succession
The rules for testamentary succession are significantly less complicated than those for intestate succession. The ISA applies uniformly to wills of persons of all faiths, other than Muslims.

Therefore, concepts of capacity, formal validity and essential validity of the wills of Hindus, Sikhs, Jains, Buddhists, Christians and Parsis are contained in the ISA. However, a deceased's religion may influence whether probate of the will is required.

For Muslims, to whom this regime does not apply, the rules of testamentary succession are not codified and are based on Sharia. As with intestate succession, the rules differ based on the deceased's sect and subsect. However, the basic rule which applies to nearly all Muslims is that of forced heirship, whereby a Muslim testator may bequeath only one-third of their estate, which is left after the payment of funeral expenses and debts, by will unless their heirs' consent is obtained. If there are multiple bequests under the will which together exceed one-third of the estate, the bequests abate proportionately. The remaining balance of the estate is inherited by the spouse and the remaining heirs.

Marriage
To compound matters, marriage may vary the rules of succession applicable to a person's estate, irrespective of whether they are male or female.

Customarily, parties professing the same religion marry under the personal laws applicable to their religion. For instance, Hindus marry under the Hindu Marriage Act 1955 and Christians under the Indian Christian Marriage Act 1872. However, persons professing different religions typically marry under the Special Marriage Act 1954 (SMA) which provides a special regime for interfaith marriage.

When a person's marriage is solemnised under the SMA, succession to their estate is governed by the ISA instead of the applicable personal laws. Accordingly, if a Hindu-Muslim marriage is solemnised under the SMA, then neither the HSA nor Sharia rules would apply; instead, the ISA would. Consequently, forced heirship rules will cease to apply to the Muslim spouse. However, this is not the case if both parties are Hindus, Jains, Buddhists or Sikhs.

Another method by which persons professing different religions may marry is by conversion of one party to the religion of the other. On conversion, succession will be as per the personal law applicable to the religion to which the person has converted.

Goa
While the above rules apply across India, an outlier is the state of Goa which was, until 1961, a Portuguese territory. Goa has its own laws regarding matters of succession and inheritance (influenced by its Portuguese history) which govern succession to the estates of persons domiciled or born in Goa instead of the personal law applicable to the person by virtue of their religion.

For further information on this topic please contact Radhika Gaggar, Shaishavi Kadakia or Chirag Shah at Cyril Amarchand Mangaldas by telephone(+91 22 2496 4455) or email ([email protected], [email protected] or [email protected]). The Cyril Amarchand Mangaldas website can be accessed at www.cyrilshroff.com.