How to File Income Tax Returns for the Deceased

Filing an income tax return for a deceased individual may sound unusual, but it's necessary if they had taxable income. The responsibility falls on their legal heir or representative to file this return for income earned up until their passing. Let's walk through this process step-by-step.

Understanding Legal Heirs

A legal heir is someone who represents the deceased's assets. To register as a legal heir, you need one of the following documents:

• Legal Heir Certificate from a court or local revenue authority

• The deceased's registered Will

• Family pension certificate from the State/Central government

• Surviving family member certificate, translated and notarized if not in English/Hindi

Registering as a Legal Heir

Here's how to register as a legal heir on the income tax website:

1. Log In: Visit the income tax e-filing portal. Use your ID and password to log in.

2. Start Registration: Navigate to 'Authorized Partners' > 'Register as Representative' and choose 'Let's Get Started.'

3. Create a Request: Select 'Create New Request.'

4. Enter Details: Fill in the category, PAN details, date of death, and reason for registration.

5. Upload Documents: Attach the necessary documents.

6. Submit: Click 'Proceed' and 'Verify the Request,' then 'Submit Request' to receive acknowledgment.

Note: Clearly state the 'Reason for Registration' as a representative assessee.

Required Documents for Filing ITR

You’ll need:

• Death Certificate

• The deceased's PAN Card

• Your self-attested PAN Card

• Legal Heir Certificate

• Any order issued in the deceased's name, if applicable

Approval Process

Once submitted, the e-filing administrator reviews your request. If approved, you can access all services for both the legal heir and the deceased. If rejected, you'll receive a reason and can make necessary corrections.

Filing ITR as Legal Heir

Upon approval, file the return just like you would for an individual. Use e-verification methods like Aadhaar OTP or net banking, or manually sign the acknowledgment and send it to the Central Processing Centre in Bengaluru.

Calculating the Deceased Person's Income

Calculate the deceased's income from the start of the fiscal year to the date of death. Use bank statements and other documents to estimate if necessary. Any income from inherited assets after their death is taxable to the legal heir and should be included in your own return.

Example:

Neelima had a rental income of ₹30,000/month and interest income of ₹10,000/month until she passed on September 20, 2023. Her legal heir should include:

• Rental Income (April 1 to September 20, 2023): ₹1,70,000

• Interest Income (April 1 to September 20, 2023): ₹56,667

For incomes post-death:

• Rental Income (September 21, 2023, to March 31, 2024): ₹1,90,000

• Interest Income (September 21, 2023, to March 31, 2024): ₹63,333

Legal Heir's Tax Liability

The legal heir must pay taxes due on the deceased's return but isn't personally liable beyond the inherited assets. For example, if you inherit ₹8 lakhs and the tax due is ₹9.5 lakhs, your liability is limited to ₹8 lakhs.

Handling Penalties or Demands

The legal heir is also responsible for penalties or fines the deceased would have owed, but only up to the value of the inherited assets.

Next Steps:

File your taxes accurately and ensure compliance with all legal obligations. Contact a tax advisor if you need personalized assistance.