Filing Income Tax Returns for a Deceased Individual
Filing Income Tax Returns for a Deceased Individual
Blog Article
While it may seem unusual, filing an income tax return for a deceased person is necessary if they had taxable income. As their legal heir or representative, it is your responsibility to file this return for the income they earned up until their passing. This step-by-step guide will help you navigate the process.
Understanding Legal Heirs
A legal heir is an individual who represents the deceased's assets. To register as a legal heir, you will need one of the following documents:
Legal Heir Certificate from a court or local revenue authority
The deceased's registered Will
Family pension certificate from the State/Central government
Surviving family member certificate, translated and notarized if not in English/Hindi
Registering as a Legal Heir
To register as a legal heir on the income tax website, follow these steps:
Log in to the income tax e-filing portal using your ID and password.
Go to 'Authorized Partners' > 'Register as Representative' and select 'Let's Get Started.'
Choose 'Create New Request.'
Enter the required details, including the category, PAN details, date of death, and reason for registration.
Upload the necessary documents.
Click 'Proceed,' then 'Verify the Request,' and finally 'Submit Request' to receive acknowledgment.
Remember to clearly state the 'Reason for Registration' as a representative assessee.
Required Documents for Filing ITR
To file the income tax return, you will need the following documents:
copyright
The deceased's PAN Card
Your self-attested PAN Card
Legal Heir Certificate
Any order issued in the deceased's name, if applicable
Approval Process
After submitting your request, the e-filing administrator will review it. If approved, you will gain access to all services for both the legal heir and the deceased. In case of rejection, you will receive a reason and can make the necessary corrections.
Filing ITR as Legal Heir
Once your request is approved, you can file the return just as you would for an individual. Use e-verification methods like Aadhaar OTP or net banking, or manually sign the acknowledgment and send it to the Central Processing Centre in Bengaluru.
Calculating the Deceased Person's Income
Calculate the deceased's income from the start of the fiscal year to the date of death. Use bank statements and other documents to estimate if necessary. Any income from inherited assets after their death is taxable to the legal heir and should be included in your own return.
For example, if Neelima had a rental income of ₹30,000/month and interest income of ₹10,000/month until she passed on September 20, 2023, her legal heir should include:
Rental Income (April 1 to September 20, 2023): ₹1,70,000
Interest Income (April 1 to September 20, 2023): ₹56,667
For incomes post-death:
Rental Income (September 21, 2023, to March 31, 2024): ₹1,90,000
Interest Income (September 21, 2023, to March 31, 2024): ₹63,333
Legal Heir's Tax Liability
As the legal heir, you must pay the taxes due on the deceased's return, but your personal liability is limited to the value of the inherited assets. For instance, if you inherit ₹8 lakhs and the tax due is ₹9.5 lakhs, your liability is capped at ₹8 lakhs.
Handling Penalties or Demands
The legal heir is also responsible for any penalties or fines the deceased would have owed, but only up to the value of the inherited assets.