scorecardresearchIncome Tax: A step-by-step guide to filing ITR for a deceased person

Income Tax: A step-by-step guide to filing ITR for a deceased person

Updated: 19 Nov 2022, 10:23 AM IST
TL;DR.
When a person passes away, their legal heirs are responsible for paying any outstanding taxes. Let us decode the step-by-step procedure of filing an income tax return for a deceased person.
Any income derived from assets inherited from the dead that was generated after the date of death will be taxable in the hands of the legal heir.

Any income derived from assets inherited from the dead that was generated after the date of death will be taxable in the hands of the legal heir.

When a person passes away, their legal heirs are responsible for paying any outstanding taxes. If they fail to file the deceased person's income tax returns (ITR), they may also be subject to interest and/or penalties.

According to the law, the individual who stands in for the decedent's possessions is considered to be their legal heir. The tax, penalty, fine, or interest that the decedent would have owed if he had lived is the responsibility of the lawful heir.

Any income derived from assets inherited from the dead that was generated after the date of death will be taxable in the hands of the legal heir. This inherited income must be reported by the legal heir on their own tax return.

Let us decode the step-by-step procedure of filing an income tax return for a deceased person.

Step 1: Before you submit the deceased person's return, you must compute his or her income from the beginning of the year to the date of death. Bank statements, investment records, and other pertinent papers required for income tax computation should be checked if you are unsure of the precise income.

READ MORE: Income Tax Return: All you need to know before filing it

Step 2: The legal successor must first register on the income tax portal under the "Authorized Partners" option as a representative assessee. The legal heir's login will be used to complete this from their account.

Step 3: The following documents must be submitted to the income tax e-filing system in order to register as a legal heir:

-Copies of the PAN of the deceased and the legal heir

-A copy of the death certificate 

-A copy of any legal heir evidence 

-And a copy of the indemnity letter.

Step 4: The legal heir must make a fresh request by following the instructions on the portal, uploading the required files, and submitting the request. The tax authorities will review the request after filing it and decide whether to approve it or reject it. Only after receiving confirmation from the tax authorities will the legally appointed heir be permitted to file a return of income for the dead.

Step 5: All services for the dead and the legal heir are available once the request has been approved. If the request is turned down, the rejection notification would be sent with a valid explanation. Uploading of inaccurate data or documents, for example, could be one of the reasons.

READ MORE: Income Tax: Planning to file a revised ITR? Things you should know before you go ahead

Step 6: Once authorised, the legal heir can file the return. ITR can be submitted by following standard procedures followed by any individual.

Step 7: The return would then be electronically verified using various procedures, such as Aadhaar OTP, net banking, etc., or it could be validated by the legal heir, who could sign the ITR Acknowledgement and send a copy of it to the Central Processing Center.

Legal heirs who fail to submit the decedent's ITR before the deadline may be subject to harsh penalties for their failure to comply. It might include a fine under section 270A, which is equal to 50 percent of the tax the taxpayer may have been able to save and/or a prosecution under section 276CC.

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First Published: 19 Nov 2022, 10:23 AM IST