Legal heir responsible to file income tax return (ITR) of deceased. Here's how to do it

 







: When it comes to the payment of income tax, nobody, even a deceased person, can escape from the responsibility if he/she is actually liable to pay tax on his/her income for a particular financial year. In case a person dies, his legal heir or legal representative is responsible to file income tax return (ITR) on his/her behalf and pay tax if anything is due.

As per tax laws, ITR of a deceased person has to be filed if his/her income before allowing capital gains exemption and deductions under chapter VIA is above the minimum exemption limit.

ITR filing is compulsory if the deceased person owns a foreign asset or has deposited more than Rs 1 crore in current account during the financial year or spent Rs 2 lakh or more on a foreign trip, or has paid electricity bills of more than Rs 1 lakh.

"According to Section 159 of the Income Tax Act, 1961, legal heir of a deceased person is responsible to file ITR and pay tax on the income of the deceased till the time of his/her death," said Tax and Investment expert Balwant Jain.

"But after death two scenarios arise- 1) the deceased person has left a will 2) there is no will. In the first case executor of the will has to file ITR of the estate of the deceased person till the will is executed and properties are distributed as per the will. But in the second case-if there is no will- the legal heir has to add the inherited asset's income in his/her own ITR, but no separate ITR has to be filed for the deceased," added Mr Jain.

Worth mentioning here is that the legal heir will also be responsible for the payment of any penalty, fee or interest on non-filing or late filing of return of income. In case there is any error in the ITR, the legal heir will be held responsible.

Tax liability of a legal heir

Mr Jain said that although the legal heir is responsible for paying taxes due on the income of the deceased till the time of his/her death, liability of the legal heir is only limited to the extent of the value of the assets he has inherited. For example, if a person receives Rs 5 lakhs as his share from his father’s property and his father's tax liability is Rs 7 lakhs, then he is not liable to pay more than Rs 5 lakhs. The liability of the legal heir shall be limited to the value of the assets inherited.

The legal heir is also responsible to pay any penalty, fine or interest which the deceased would have been liable to pay had he not died. But in such cases also liability of a legal heir would be limited to the extent of the assets he has inherited from the deceased.

How to file ITR of a deceased person

For filing ITR on behalf of the deceased person, registration as a legal heir is mandatory on the income tax website. For registration, PAN of both deceased and legal heir should be registered on the e-filing portal. To complete the registration process the following documents will be required:

- Copy of death certificate
- Copy of the PAN Card of the deceased
- Self-attested PAN card Copy of the Legal heir
- Legal Heir Certificate issued by the competent authority

Once the request for registration as legal heir is approved by the tax authority, the legal heir can file ITR on behalf of deceased.



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