Succession Certificate and Repatriation of Funds
Obtaining a succession certificate and repatriating money can be a significant challenge for Non-Resident Indians who must manage their estates and assets in their native country. NRIS must comprehend the steps to apply for a succession certificate and repatriate money.
When someone passes away, a legal document called a succession certificate allows their rightful heirs to inherit their assets and debts. A civil court typically issues this certificate, establishing the authenticity of the heirs and their right to inherit the deceased’s assets. When a family member passes away, NRIs immediately need to get a succession certificate for assets that are situated in India to make the transfer of assets and money more accessible.
In general terms, the objective of a succession certificate is twofold: first, it safeguards the rightful successors, and second, it minimizes risk for the debtors. Its primary purpose is to support the successor in obtaining debts to which the dead were entitled and to ensure the laws governing succession are duly followed.
A succession certificate’s scope is restricted to shares, stocks, debts, provident funds, bank deposits, insurance, or any other security of the central or state government to which the deceased person was entitled. As per section 371 of the Indian Succession Act of 1925, the succession certificate is issued by the Court.
When a deceased person lived in a specific district, the District Judge for that area has jurisdiction. If no such place is available, jurisdiction applies to the location where any property belonging to the deceased may be found.
You can file the Petition for a grant of Succession certificate based on a Will or, in the absence of a Will, on Natural succession.
The Process of Obtaining a Succession Certificate:
A succession certificate is obtained through a legal process that requires several legal requirements and paperwork. It’s crucial that you, as an NRI, retain the services of a qualified attorney or other legal professional with knowledge of India’s succession laws. Let’s talk about the steps you need to follow to obtain the Succession Certificate:
- Compile Necessary Documents: Getting all the necessary paperwork is the first step in getting a succession certificate. This paperwork includes the deceased’s death certificate, information on the heirs, identification and residency evidence, and any current wills or testamentary documents.
- File a Petition: The next step is to file a petition with the appropriate civil Court seeking the issuance of a succession certificate. This Petition should include all the necessary information about the deceased, the heirs, and the assets for which the certificate is being sought.
- Publication of Notice: After the Petition is filed, the Court issues a notice in local newspapers to invite objections from other potential claimants to the deceased’s assets.
- Court Hearings: The procedure for obtaining the succession certificate involves filing a petition, and if someone replies to the Petition, file a counter reply. This person can be any family member, interested party or third party. Once the pleadings are submitted, oral and documentary evidence will be produced before the Court for the movable assets claimed under the Petition. After the evidence stage, the Court will consider all the paperwork produced. Suppose the Court is satisfied with the evidence provided. In that case, it will issue the succession certificate to the rightful heirs, granting them the legal authority to claim the assets and liabilities of the deceased in India.
Once you obtain the Succession Certificate, you must take it to the bank officials so that they can act on it and give you your rightful movable assets.
Challenges and Considerations for NRIs:
The grant of a succession certificate might be complex for non-resident Indians abroad may encounter language and distance barriers. NRIs should engage a trusted Indian legal representative to assist with paperwork and legal requirements. NRIs should also be aware of possible disagreements or issues throughout the procedures. A succession certificate might take a long time to decide due to family conflicts, competing claims, or problems with document authentication. To ensure the certificate is issued smoothly and on schedule, NRIs should proactively address any such issues and seek peaceful agreements.
As per section 383, a succession certificate can also be revoked/cancelled in certain specific situations, such as fraud, defective proceedings, or when the certificate becomes useless due to circumstances.
Repatriation of Funds:
Once the succession certificate is obtained, NRIs may need to navigate the process of repatriating funds from India to their country of residence. Repatriation refers to transferring funds or assets from India to another country, and specific guidelines and regulations govern this process.
The RBI lays down rules and regulations for the repatriation of funds by NRIs. The NRI must have an NRE/NRO account in India to repatriate the money. When a person attains the status of NRI, he is required to open his bank accounts in India as a Non-Resident External Account (NRE Account), Non-Resident Ordinary Account (NRO Account), or foreign currency non-resident account (FCNR Account).
The NRE Account is opened to save the earnings of an NRI from abroad, and the NRO Account is opened to save the revenues generated from India. An NRI can freely transfer money from NRE and FCNR accounts as no limitation has been set on these accounts. As the Reserve Bank of India specifies, you can transfer funds from an NRO account up to a maximum of USD 1 million per financial year.
People often ask if this process can be initiated and completed without coming to India. Yes, an NRI can repatriate the funds without coming to India by appointing an extraordinary power of attorney for the said purpose.
NRIs can repatriate funds from India for certain purposes, subject to fulfilling specific conditions and documentation requirements. For example, funds can be repatriated at the time of sale of assets, upon obtaining a succession certificate, inherited from a deceased family member in India, or certain types of investments in India.
Each time the funds are repatriated, tax implications must be addressed.
Documents Required for repatriation of funds
- The Application Form requesting for repatriation –This Form covers the details about the payee’s bank account and source of funds.
- PAN Card
- A2 form — FEMA declaration
- Form 15 CA and 15 CB (required for NRO a/c) confirm that the customer has duly paid the requisite taxes.
- Documents supporting the source of funds.
- KYC details
- National Insurance Number
Further, it is mandatory to have all the Original Bank related documents, without which funds cannot be repatriated.
Challenges and Compliance Requirements:
Fund repatriation by NRIs can be subject to various compliance requirements, including submitting appropriate documentation, tax clearances, and adherence to foreign exchange regulations. These regulations prevent money laundering and ensure transparent cross-border fund movement.
NRIs should be aware of the specific documentation requirements and the role of authorized banks in facilitating the repatriation of funds. To ensure compliance with the regulatory framework, NRIS must maintain clear records of the sources of funds, taxes paid, and the purpose of repatriation.
Conclusion:
Obtaining a succession certificate and repatriating funds can be intricate and demanding for NRIs managing assets and estates in India.
By engaging reliable legal and financial professionals and staying abreast of the latest regulatory developments, NRIs can ensure that asset and fund transfers are carried out lawfully and beneficially. With the proper support and guidance, NRIs can navigate the complexities of succession laws and repatriation regulations, securing their rights and facilitating the efficient management of their interests in India.
