INDIA Law and Practice Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
2.3 Forced Heirship Laws There is no forced heirship regime in India except in relation to Muslims, who are governed by Islamic law, and residents of the state of Goa, who are governed by the Goa Succession, Special Notaries and Inven - tory Proceeding Act, 2012. Under Islamic law, a Muslim cannot by a Will dispose of more than one-third of the surplus of his or her estate after payment of funeral expenses and debts. Testamentary dispositions in excess of such one-third limit cannot take effect unless the heirs consent to them, after the death of the testator. However, since the introduction of the UCC in Utta - rakhand, the principle of fixed shares does not apply to Muslims anymore in Uttarakhand and general rules of succession regarding the estate of a Muslim dying intestate are now applicable. These rules would apply to relatives (of the deceased) specified in Class I and Class II of Schedule 2 of the UCC. Fathers (regardless of their religion) have been recognised as Class I heirs and are eligible to receive property by way of intestate succession in the state of Uttarakhand. Goa has its own law influenced by its Portuguese his - tory which governs succession to the estate of an indi - vidual domiciled or born in Goa. Residents of the state of Goa, regardless of their religion, cannot dispose of more than 50% of their estate (which is automatically transferred to that deceased’s surviving parents). Fur - ther, in case the deceased is not survived by his or her parents, the other ascendants of the deceased will be entitled to inherit one-third of the deceased’s estate. 2.4 Marital Property In India, any property which is self-acquired does not become a jointly owned property by virtue of mar - riage as India does not follow the principle of com - munal ownership of property. Only ancestral property is treated differently. The spouse who owns the self-acquired property can transfer such self-acquired property without the con - sent of the other spouse. Self-acquired property is protected under Hindu Law, and even the Class I legal heirs of a person (including his or her spouse) who have acquired such property cannot claim a share
abroad, or special regulatory dispensations to be obtained. As per the ODI regime, an approval for set - ting up such entity outside India is essential only if such approval is required under the host country’s laws, which simplifies the process for setting up a global family office for Indians, subject to regulatory compliances and checks. Family offices (FO) in India have increased consider - ably in the last few years growing from 45 in 2018 to nearly 300 in 2024. Notably, the new generation of wealthy and high-net-worth individuals have been focusing on wealth management and investments through FOs and this surge is attributed to a shift towards a more structured and professional approach to achieve the intended goals. As a corollary to making overseas investments, vari - ous HNWI in India are also exploring making invest - ments in or via Gujarat International Finance Tec-city (GIFT City) which serves as an International Financial Services Centre (IFSC) in India and functions as a free trade zone exempt from Indian foreign exchange regulations (from an outbound perspective) with vari - ous tax incentives enabling flow of finance, financial products, and services across borders. In 2022, the IFSC Authority (IFSCA) put in place Fam - ily Investment Fund (FIF) framework under Part-C of the erstwhile IFSCA (Fund Management) Regulations, 2022 which provided impetus to single families to set up FIFs in the IFSC for the purpose of facilitating glob - al investments in a structured manner. Further clarifi - cations and relaxations with respect to FIFs were pro - vided by the IFSCA vide Circular dated 1 March 2023. These regulations called for approval and licences to be issued to FIFs set up in GIFT City and have now been subsumed in the revised IFSCA (Fund Manage - ment) Regulations, 2025 (FM Regulations, 2025). While GIFT City aims to facilitate onshoring of offshore transactions and provide financial services that adhere to international standards, despite the favourable legal framework, the regulatory ambiguity has proven to be a stumbling block for structuring and making invest - ments in or via GIFT City including through FIFs.
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