Income Tax Return Filing for Deceased person in India

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One of the most interesting things that amazes people is Income Tax Return Filing for deceased persons in India. It’s true that a deceased person can be taxed in India. Thus, Death and Taxes are inevitable. Legal Heir or any other representative needs to do Income Tax Return Filing on the behalf of taxable income earned till the date of death. In this article, we will understand the complete concept of ITR filing for deceased persons in India.

What is Income Tax Return Filing?

The Income Tax Return (ITR) is a document used by taxpayers to report their income generated. Also, it indicates taxes due to the Income Tax Department. There are a variety of ITR forms that can be used based on the taxpayer’s source of income and the quantity of money generated.

ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 & ITR 7 forms are commonly used in Income tax return filing. Thus, The Income Tax Act of 1961 makes it necessary for a taxpayer to file an income tax return under a variety of situations.

For example, a taxpayer may desire to submit an income tax return to record his income for the year, carry along losses, claim a tax refund, and claim tax benefits, etc. The income tax portal provides facilities to file these Income Tax Returns.

Who is liable to file ITR in India on the behalf of a deceased person?

The legal representative or heir of a deceased individual must file an income tax return on his or her behalf. But if another person is named as the individual in charge of the inheritance, that person is liable to file ITR. Generally,  a husband or wife or firstborn son/daughter assumes the role of the legal representative or becomes the heir.

Section 159 of the Income Tax Act states:

  • As a representative assesses the dead person, the legal representative must file a return of income generated from the beginning of the financial year to the date of death.
  • Income generated after the person’s death is subject to income tax of the lawful heir or executor of the departed estate, but it is not recorded on the deceased person’s return.
  • Lastly, The person who has died legal or contractual representative’s tax scope is limited to the deceased person’s estate. The tax liability does not have to be settled out of the professional representative’s own money.

How to do Income tax return filing for deceased persons in India?

To do income tax return filing for a deceased person in India, you need to follow the below-mentioned steps-

  • Register as a Legal Heir on the official income tax e-filing portal.
  • After getting the approval, download the ITR form is applicable to the deceased person.
  • Fill the ITR Form.
  • Next, Login Into the Income Tax Portal after entering Legal Heir Credentials.
  • Choose e-filing and submit the filled return digitally.
  • Fill in the necessary details such as PAN, Assessment Year, ITR Form Name, etc.
  • Upload the file and sign it using Digital Signature Certificate.

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The legal heir’s tax liability while ITR Filing

Taxes due on the deceased’s income tax return must be paid by the rightful heir. He is not, however, personally accountable for the taxes owed. So, The legal heir’s obligation is restricted to the degree that the assets he received are able to cover the obligation.

For example, if an individual obtains Rs 8 lakhs from their father’s estate and his father’s tax burden is Rs 9.5 lakhs, he cannot be obliged to pay something beyond Rs 8 lakhs in taxes. In simple words, The legal heir’s obligation is limited to that same value of the assets received.

What is the Tax obligation in the event of a fine or penalty?

The legal successor is accountable for the tax due as well as any additional amounts due, such as penalties, fines, or interest, that the decedent would have owed had he not died. It indicates that penalty procedures for the deceased’s default might be brought against the legal heir as well. Although, His obligation will be concentrated on the assets acquired from the decedent.

All about Income Tax E-Filing 2.0 portal

Moreover, If you want any other guidance relating to ITR  Filling, please feel free to talk to our business advisors at 8881-069-069.

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