Did you know that deceased people can also be taxed? As ironic as it sounds, the income tax returns for a deceased person has to be filed, if he/she has taxable income. His legal heir/representative needs to file the return on his behalf for the income earned till the date of death. The legal heir has to register himself at the income tax website for filing the return on behalf of the deceased. In this article, we will discuss how to file the income tax return for the deceased by a legal heir.
Legal heir, in the eyes of law, is the person who represents the assets of deceased. To register as legal heir, any of the following documents are accepted as legal heir certificates:
- The legal heir certificate issued by the court of law
- The legal heir certificate issued by the Local revenue authorities.
- The certificate of the surviving family members issued by the local revenue authorities.
- The registered Will of the deceased person
- The family pension certificate issued by the State/Central government. The most common certificate available is the certificate of surviving family members issued by the local revenue authorities (Municipality, nagarpalika). This certificate is usually issued in regional language, so the legal heir is required to translate it into English/Hindi and get it duly notarized.
Any income earned after the date of death from the assets inherited from the deceased is taxable in the hands of the legal heir. Legal heir should include this income inherited from the deceased in his own income while filing own income tax return.
All income up to the date of death must be reported and all credits and deductions to which the decedent is entitled may be claimed.
As a legal heir, you have to file the return on behalf of the deceased for income till the date of death. Calculate the income of the deceased from the start of the year till the date of death, and thereby the tax payable on it in the same manner as if the deceased is alive. If you don’t know the exact income, then you should refer Bank Statements, investments and other relevant documents necessary for income tax calculation.
Any income earned after the date of death from the assets inherited from the deceased is taxable in the hands of the legal heir. Legal heir should include this income inherited from the deceased in his own income while filing own income tax return.
The legal heir is responsible for paying taxes liable on the Income tax return of the deceased. However, he is not personally liable for the taxes due. The liability of the legal heir is limited to the extent to which the assets he inherited are capable of meeting the liability.
The legal heir is responsible for the tax payable, and also for the other sum i.e. penalty, fine or interest which the deceased would have been liable had he not died. It means that the penalty proceedings for a default by the deceased can also be initiated against the legal heir. However, his liability would be limited to the extent of the assets inherited from the deceased.