Bringing inheritance money from India to the USA involves transferring funds through authorized banking channels (e.g., NRE/NRO accounts) and reporting to the IRS using Form 3520 if the amount exceeds $100,000. While India has no inheritance tax, you must ensure all Indian taxes are cleared, and you may need to file FBAR for foreign accounts.
You need to write the inheritance to the IRS and submit Form 3520, with your annual tax return details. According to U.S. regulations, if you are gaining or making a profit from the inherited property, including capital gains, dividends, or interests, you will need to pay tax on such inherited income.
IRS Form 3520.
It is essential to properly file a timely Form 3520 to report a foreign inheritance or foreign gift in the year it is received by a U.S. person, as large penalties may be imposed on a taxpayer if the IRS later discovers that an inheritance was not properly declared.
You can send money directly from your bank account in India to the recipient's bank account in the USA. Most Indian banks (like State Bank of India, ICICI Bank, HDFC Bank, etc.) offer wire transfer services. This can be done either online or by visiting the branch.
General rules for gifts that come from abroad
However, the United States has no foreign gift tax1, and the gift does not count as taxable income, so no taxes are typically due. (However, if the asset gifted generates income (such as from an inherited rental property), that will likely be counted as taxable.)
If you receive an inheritance from a foreign estate or non-resident alien, or gifts from non-resident aliens exceeding $100,000 (USD), then it must be reported to the IRS. This includes the total of all foreign inheritance or gifts received.
The Reserve Bank of India (RBI) governs such transactions through the FEMA (Foreign Exchange Management Act). NRIs can repatriate up to $1 million per financial year from India, including proceeds from the sale of property.
Bank Transfer
Bank transfers are usually the cheapest option when it comes to funding your international money transfer with Wise. Bank transfers can be slower than debit or credit cards, but they usually give you the best value for your money. Read more how to use bank transfers as a payment option.
The federal estate and gift tax exemption is $13.99 million per individual in 2025, and will increase to $15 million in 2026 under the One Big Beautiful Bill Act. This new exemption level is permanent and will be adjusted annually for inflation starting in 2027.
Your beneficiaries (the people who inherit your estate) do not normally pay tax on things they inherit. They may have related taxes to pay, for example if they get rental income from a house left to them in a will.
Form 3520 is required when receiving foreign inheritance exceeding $100,000 in a calendar year. FBAR (FinCEN Form 114) is needed if the combined value of foreign bank accounts exceeds $10,000 on any day during the tax year.
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
No, there is no inheritance tax in India currently. Inheritance tax or estate tax was there in India after independence since the Estate Duty Act was implemented in 1953. However, it was abolished in 1985. Currently, many discussions are going on that propose levying taxes on any asset you inherit.
How does the IRS learn about inherited assets? Inherited assets may appear through estate filings, financial institution reporting, probate documents, property title transfers or tax reporting by executors and trustees. Is it legal to hide inheritance from the IRS? No.
According to it, residents of India can remit a maximum of $250,000 within a given financial year to individuals living overseas. This includes both capital and current account transactions.
Yes, but the IRS cannot directly access foreign bank accounts. Instead, the agency relies on tax treaties, mutual collection assistance requests, and other international agreements like the Tax Information Exchange Agreement to identify and pursue funds held offshore.
A trade or business that receives more than $10,000 in related transactions must file Form 8300. If purchases are more than 24 hours apart and not connected in any way that the seller knows, or has reason to know, then the purchases are not related, and a Form 8300 is not required.
It must be filed along with the tax return of the NRI, PIO, or American Indians who inherit property in India. This not only applies to property but also to other financial assets such as cash and investments. There are two reasons why Form 3520 has to be filed by those who want to bring money from India to the US.
For non-resident Indians (NRIs), long-term capital gains are subject to a flat tax* rate of 20%.
Bringing Inherited Funds to US Accounts: Generally, transferring inherited money to US bank accounts doesn't require additional reporting. The ideal situation is to move the funds to your account overseas and then bring it to the US. However, you must file a declaration form if you bring the money into the US as cash.
You must declare any foreign inheritance exceeding CAD 100,000 on Form T1135, the Foreign Income Verification Statement. On the form, you'll include the details of the inheritance, such as the type of asset, its value, and the country of origin.