When an NRI inherits property in India and later sells it, a common assumption is that the "cost" for capital gains purposes is the property's value at the time it was inherited. That's not how it works: for inherited property, the cost of acquisition carried forward is the original owner's actual purchase cost — not the fair market value on the date you inherited it.
The holding period carries over too
The same carryover applies to the holding period: it's measured from when the original owner acquired the property, not from the date you inherited it. That means a property inherited quite recently can still qualify as long-term (and get LTCG treatment) if the original owner held it for decades — the clock never resets at inheritance.
The pre-2001 exception
If the original owner acquired the property before April 1, 2001, current rules allow electing the fair market value as of April 1, 2001 as the cost basis instead of the actual historical purchase price — generally a favorable option for older properties, but one that requires a registered valuer's certificate to support the claimed value, not just an informal estimate.
None of this changes how TDS is withheld at the point of sale: the Section 393(2) TDS estimator on this site's Real Estate Capital Gains page still applies the same way, withholding on the full sale consideration regardless of whether the property was purchased or inherited — the inheritance only affects the gain calculation itself, not the buyer's withholding obligation.