Digital Assets Will (India)

Under Indian law, the question of whether digital assets form part of a deceased person's estate is determined primarily by the nature of the asset and the terms of the service agreement under which it was held. The Indian Succession Act 1925 broadly defines 'property' to include all property — movable and immovable — wherever situated. Digital assets that have ascertainable monetary value or commercial utility are generally treated as property of the deceased and form part of the estate. For cryptocurrency and virtual digital assets (VDAs): The Finance Act 2022 introduced specific taxation of virtual digital assets under Section 115BBH of the Income Tax Act 1961, defining VDAs as any information, code, number, or token generated through cryptographic means or otherwise. While no specific law governs the inheritance of cryptocurrency in India, the general principles of the Indian Succession Act 1925 apply — cryptocurrency held in a private wallet (where the deceased controls the private keys) passes under the Will like any other property. The executor's ability to actually access the wallet depends entirely on obtaining the private keys. For online bank accounts: Amounts in bank accounts are movable property and form part of the estate. Most Indian banks have procedures for releasing deceased account holders' funds to legal heirs or nominees, but the procedures vary and require a succession certificate or probate in the absence of a valid nomination.

The secure conveyance of private keys and access credentials is the central practical challenge in cryptocurrency estate planning in India. A private key that is lost cannot be recovered — the cryptocurrency becomes permanently inaccessible. Conversely, a private key that is stored insecurely can be stolen, resulting in loss of the asset during the testator's lifetime. Several approaches are used in Indian estate planning for digital assets. Separate sealed letter: The most common approach is to prepare a sealed letter containing the wallet addresses, private keys (or seed phrases), and exchange account credentials, stored separately from the Will (to avoid the Will being read during probate before the assets can be secured) in a trusted location — a bank safe deposit box, a fireproof home safe, or with a trusted lawyer. The Will then refers to the letter and directs the executor where to find it. Multi-signature wallets: For significant cryptocurrency holdings, a multi-signature wallet requires multiple private keys to authorise a transaction. The testator can set up a 2-of-3 multisig wallet, keeping one key themselves, giving one to the executor, and keeping the third in escrow — so neither the testator alone nor the executor alone can access the funds, but the executor and the third party together can access after the testator's death.

The taxation of inherited cryptocurrency and virtual digital assets (VDAs) in India is governed by the Finance Act 2022 amendments to the Income Tax Act 1961 and has specific rules that differ from the treatment of other inherited assets. At the time of inheritance: As with other assets, there is no inheritance tax in India. Receiving cryptocurrency or other VDAs under a Will does not itself attract income tax in the hands of the beneficiary at the time of receipt — Section 56(2)(x) of the Income Tax Act 1961 exempts property received under a Will from being treated as income. On subsequent sale or transfer: Under Section 115BBH of the Income Tax Act 1961 (introduced by Finance Act 2022), any income from the transfer of a virtual digital asset is taxed at a flat rate of 30% (plus applicable surcharge and cess), with no deduction for cost of acquisition or improvement, and no set-off against other income. For inherited VDAs, the cost of acquisition is the cost paid by the original owner (the deceased) under Section 49(1) of the Income Tax Act 1961 — the beneficiary does not get a step-up in cost basis at the date of inheritance. TDS on VDA transfers: Section 194S of the Income Tax Act 1961 requires the buyer (or exchange) to deduct TDS at 1% on VDA transfers above threshold amounts. This TDS is deductible by the beneficiary against their tax liability. For digital intellectual property (software, domain names, online content): Royalties and capital gains from these assets are taxed under the normal income tax rates applicable to the beneficiary.

Online business assets and digital intellectual property represent significant value for many Indians — particularly those involved in e-commerce, content creation, software development, or digital services — and require specific attention in a Will. For e-commerce businesses: An Amazon, Flipkart, or other marketplace seller account represents a business asset with inventory, reviews, sales history, and customer relationships. These platforms have terms of service that may restrict transfer of accounts — the Will should direct the executor to contact the platform and follow their official transfer or account termination procedure. The inventory of an e-commerce business is tangible property (stock) that can be transferred under the Will like any other property. For digital intellectual property: Copyright in original literary, artistic, dramatic, or musical works created by the deceased vests in the estate under the Copyright Act 1957. Copyright in India lasts for 60 years after the author's death. The Will should specifically bequeath the copyright in named works (or all copyrights) to the named beneficiary, along with the right to exploit those works. This includes websites, blog content, books, software code, photographs, and videos. For domain names: Registered domain names are contractual rights. The executor can contact the registrar and follow the transfer procedure, providing a death certificate, probate or succession certificate, and the beneficiary's details.

A Digital Assets Will (India) does not legally require a lawyer in India, and individuals and businesses may draft and execute the document independently. The Indian Succession Act, 1925 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified India lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of India and the High Courts have jurisdiction over disputes arising from this type of document. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.