ITR must be filed as income during the period when the deceased’s estate continues to generate income. This must be done until such property is distributed to the legal heirs or those named in the will of the deceased. After that, the income from these assets is linked to the income of the inheritors of the assets and then taxed in their hands.

So, how do you file a tax return for a deceased person and how long does it take? What happens if there is a disagreement between the remaining family members on who is responsible for filing the return, or what if there is a delay in doing so? We reached out to chartered accountants (CAs) and lawyers to get their thoughts on these questions.

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Why is it necessary to file ITR for a deceased person?

Explaining the logic behind this, Rajat Dutta, founder & founder, Legacy Needs Services, said, “Death does not abrogate one’s liability for paying taxes. Tax is levied on income from five specified heads, namely income from wages, real estate, business and labor profits, business profits and other sources. After the death of a person, the income under these heads continues to attract tax. “

If all taxes and other obligations are not paid, the property of the deceased cannot be distributed to the legal heirs.


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Who can file such ITR?

According to Dutta, the deceased’s ITR can establish a legal representative, who may not necessarily be the heir of the deceased’s estate. However, legal heirs can also be legal representatives.

A legal representative is a person who meets the IT requirements and meets the following five criteria:

One, if there is a written will that has been confirmed as a final will (based on a court order), the executor, or the person named in the will may be the legal representative. law. Two, legal heirs named in the legal certificate. Three families, survivors, have certificates issued by local authorities. Four, one person (such as a spouse) holding a family pension certificate issued by the government. Five, a nominee or co-signee of the deceased’s bank account with an official sealed letter from the bank or financial institution stating their identity.

For the filing of the death tax certificate, the legal representative must first register in the tax portal for this purpose. Note that, since the legal representative files a tax return for the deceased’s income, the tax liability will be limited to the area of ​​the deceased’s estate. “The legal representative’s income or assets are protected,” Dutta said.

In what time period ITR has to be filed?

Let’s see this with an example. Suppose someone died on 30th May 2022. Then you have to file ITR for the financial year 2022 (1st April 2021 to 31st March 2022) to 31st July 2022. This is the period of time of the person’s life. For the 2023 financial year, two periods will be determined for taxation: from April 1 to May 30, 2022 (when the person is alive), and secondly, the remaining part of the fiscal year (after the death of the person but still generating assets. income). After that, the legal representative must continue to file tax returns every financial year until the deceased’s property is transferred (distributed) to the heirs.

Mint spoke to two CAs, who said that, as per the law, and in relation to the above example, one return must be filed for FY 2022 and two returns for both periods. separate from FY23. However, one of the two CAs pointed out that since only one return can be filed during a financial year in the income tax portal, only one consolidated return will be filed. actually set in two different eras. According to him, this separation has already existed before when there was a tax receipt in physical form.

How to file ITR?

Neetu Brahma, director of Nangia Andersen India, explained the process of filing the deceased’s ITR. First, you have to register as an authorized representative of the deceased using your login ID (PAN) and password in the IT portal. Then, the IT department checks the submitted documents and either approves or rejects your application. If your application is rejected, you will be informed of the reason for the rejection and you can take steps to correct it. “The whole process is online and if you have all the documents in the hands of the legal heirs, the process is very simple,” says Brahma.

After approval, you can file the decedent’s certificate the same way you file your personal return. But, the ITR of the deceased will be filed as a separate return apart from the ITR of the legal representative.

How to deal with the delay in filing ITR of deceased?

“If you miss your tax due date, you can file a late return, just as you would if you missed the deadline. Legal heirs are responsible for paying taxes and penalties, fines or interest. However, his liability is limited to the extent of the assets inherited from the deceased, “said Brahma. What happens if you also pass the late return period? According to Brahma, The return of the law is no longer voluntary. Heirs and it must be submitted at the time of assessment, if the tax authorities have initiated it.

Archit Gupta, founder and CEO of Clear, said, “The option to submit late tax returns is not yet open in the new ITR portal. However, it can be submitted to the AO (assessing officer) of the deceased person by visiting them.

How does a will affect the death tax liability?

“A valid will (no technical issues) which is the last written and signed will of the deceased is a ‘supreme umbrella document’. The executor (whether named in the will, or appointed by the court, if not named) is responsible for the analysis of all debts (including income taxes and penalties, fines or interest on account of deferred payment of tax) outstanding on the date of death and releasing them before distributing the property,” said Dutta.

The experts we met pointed out that in the absence of an executor (in the absence of a will), people can choose one of them to be registered as the legal heir by filing the deceased’s ITR in the family / legal heirs. Otherwise, if there is a conflict in the family, they can approach the court to appoint an executor/administrator for that role.

Can legal heirs claim credit for TDS (tax deducted at source)?

Any TDS deducted from the hands of the deceased after the date of his death, can be claimed as a loan from the person in whose hands the income was. Till the date of death can be claimed as TDS in the hands of the deceased; from the date of his death until the transfer of the property to the legal heir, it can be obtained by the executor or legal heir; and after the date of transfer of the property to the legal heirs.

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