June 30, 2015

Who is responsible to file and pay Income Tax after death?

We all know the rules and regulations about filing IT Return when we are alive. However, many of us don’t know what the Income Tax rule states in case the death of the taxpayer. It is common that after the death of the taxpayer, his/her spouse, legal heirs or family members never filed an IT return. But it is the responsibility of spouse, legal heirs or family members to file the IT Return!!!

Income Tax of Deceased

You never found any advertisement or publication about this from IT Department too. However, there is a section in Income Tax that specifically mentions the rules about this situation. The whole details are available in section 159 of the Income Tax Act, 1961 (Act). According to section 159 of the Income Tax Act, 1961 (Act), if a person dies, then his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the similar manner and to the same extent as the deceased.

Points to remember

  • The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee.
  • Any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased;
  • Any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representative; and
  • All the provisions of this Act shall apply accordingly.
  • The tax must be payable from 1st April to death of the taxpayer.
  • There is no different process to file the return of a deceased taxpayer. It is same as you used to file IT return either through online or through offline.
  • Legal heir is not responsible to pay the income tax dues from his own pocket. But he is liable to pay the dues on behalf of the deceased income or assets. The legal heirs are liable up to the extent of the assets that they inherit. Let us say Mr.X died with an asset as an FD worth Rs.1, 00,000. However, his tax liability is Rs.1, 50,000. In that case, his legal heirs are responsible to pay only Rs.1, 00,000 but not for the remaining dues of Rs.50, 000.
  • If there is any refund due to the taxpayer, then such refund will be credited to the bank account of an income tax payee.

How to file the IT return on behalf of the deceased IT Payee?

1) The first step is to get the Legal Heir Certificate. According to a law below documents, are considered as valid.

  • Legal Heir Certificate issued by a court.
  • Legal Heir Certificate issued by local revenue authorities.
  • Surviving family member certificate issued by local revenue authorities.
  • The registered WILL.
  • The family pension certificate, issued by State/Central Govt.

2) Calculate the income of the deceased (exactly like an individual calculation and there is no change in this process). Before proceeding further, collect the below details as a proof.

  • Collect all bank statements of a deceased IT payer.
  • Collect Form 16 and 16a.
  • This collection of bank statements and the Form 16 or 16A makes sure to tally the income.

3) Get the notarized affidavit for filing IT return on behalf of a deceased.

So documents required for filing IT Return on behalf of the deceased are as below.

  1. a) Copy of Death Certificate
  2. b) PAN Card copy of deceased
  3. c) PAN Card of the legal heir (with self-attested)
  4. d) Legal Heir Certificate
  5. e) Notarized affidavit

Scan all above documents for uploading purpose.

4) Get the Digital signature Certificate (DSC) of legal heir. The list of such DSC providers is available HERE.

5) Once you completed above steps then you have to file IT Return. There are two types to file. One is online and another is offline. I will explain the both.

ONLINE PROCEDURE

The whole procedure is explained in the e – File portal. The same I am explaining below.

  • Login to e-File portal and go to my account to register yourself as a legal heir.
  • Provide the necessary details and upload the documents which I mentioned above.
  • Click on SUBMIT tab. The request will be sent to e-Filing Administrator.
  • e-Filing Administrator approve or disapprove after going through the details.
  • Notification will be sent to the registered email id of the legal heir.
  • Based on documents submitted IT Department allow you to file the IT return into two categories. One is a temporary legal heir. Because legal heirs failed to submit the legal heir certificate mentioned above. Such temporary legal heir can access the portal and upload the ITR/Forms, but unable to access all other services like add CA to submit audit forms (other than ITR) on behalf of the deceased.
  • The permanent legal heir (the one who submitted the valid legal heir documents) can file ITR/Forms or view status. He can use the portal exactly like an individual taxpayer. He can view Status of Income Tax Return/Forms, ITR-V Acknowledgment and other filing status of e-Filed, Returns/Forms in respect of the deceased or can also view the status of the request under My Request List menu, post Login.
  • Once, after approval of the application by e-Filing Administrator, legal heir can file IT return on behalf of deceased using legal heir login.
  • The legal heir should add his PAN Card in the verification part of IT form, validate, and generate xml of the return.

OFFLINE PROCEDURE

The legal heir must visit the concerned assessing officer (AO). Submit the documents, which I explained above. After verification, AO will approve to file the IT return. Once the legal heir gets the approval, then he can file the return on his own or can take the help of tax experts. The name should be mentioned as “late (name of deceased) through legal heir (name of the person filing)”.

Overall, the process is not so simple. Because once the taxpayer dies, then dependents must collect all documents listed above. After that, they must take an initiative to file the IT Return. Hence, it is best to advise your spouse or legal heirs about this important aspect of income tax.

202 Comments

  1. Assessee died in june 2019 , return for assessment year 2018-19 is filled as a legal heir in September , 2019, now for assessment year 2019-20 the return for 3 months is not accepted as legal heir …what is the procedure to file return for assessment year 2019-20..

    Reply
    • Dear Siddharth,
      It should be considered as the legal heir income and accordingly must be filed.

      Reply
    • Hi,
      My father passed away in September 2019
      till AY 2019-20 he filed his return
      He had only Pension and FD Interest Income.
      Now all the FD’s transferred to my Mom
      pension also will come to mom hence forth.
      Still do we need file return for my dad?
      do we need to show the source of income for my mom as hence forth return to be filed in her name?
      Regards,
      Meena

      Reply
      • Dear Meena,
        Yes, you have to file ITR on behalf of your father.

        Reply
  2. Dear Sir,
    I went through the article and it is very useful. Thank you. I have a similar case. Did I understand the same correctly?
    A govt employee passed away during his service period on 31/10/2018. I wanted to confirm a couple of things.
    1. Gratuity and leave encashment received by the legal heir after the Govt employees death will have to be shown in the Legal heirs return of income as Exempt incomes, correct?
    2. LIC claim received by legal heir is to be shown in legal heir’s return of income?
    3. PF amount received by the legal heir after the death of Govt employee, is to be shown in Legal heirs return of income as exempt income, correct?
    4. So only incomes that I have to show in Govt employee’s return of income is his salary till the date of his death and interest incomes such as bank interest and FD interest till the date of his death?

    5. Also, all the incomes post 31/10/18 will be shown as taxable income in legal heirs return of income?

    Reply
    • Dear Meghavi,
      1) Yes
      2) Yes and it is tax-free income.
      3) Yes.
      4) Correct
      5) Yes.

      Reply
  3. My Grandfather is passed away and before his death we received income tax notice because of the bank transactions of my grandfathers bank account but my father’s don’t have any idea about and my Grandfather don’t have any property or asset which is transferred to my parents still we received income tax notices for dues and we have try to filed return as per CA guidelines but they don’t satisfied.Now we don’t understand what to do that my Father is liable to pay the tax?

    Reply
    • Dear Sarita,
      I am not sure in detail regarding the issues. But it is better to be in touch with our CA and resolve it.

      Reply
  4. Dear Basavaraj,

    My father passed away in June 2011. He had not filed income tax returns in the last few years before death. We had not filed his return for AY 12-13 as well.

    People in family – my mother, my sister, myself, my wife and my daughter.

    All monies from his account were distributed roughly 1/3rd between my mother, my sister and my wife. (My father did not have a will).

    My sister received a Sec 148 notice on 29/03/2019 to file return for AY 12-13 probably due to the high value transactions in her bank account in that year. We file her return in April 2019. Thereafter, AO has asked for info whereby we have submitted sister’s bank statement and mutual fund investments statement.

    Questions:
    – Can the AO issue notice requiring us to file income tax return for my father for AY 12-13?
    – Can the AO issue notice to my mother and wife for AY 12-13?
    – The AO has asked my sister to share bank statements and income statements of my father for AY 12-13. Can my sister mention that those details are not available with her? If yes, then the AO ask my mother to share those details?

    Thanks

    Reply
  5. My Father was a Government Employee.

    He died on 25/03/2019. I need to file taxes on behalf of him.

    1. My father died on 25/03/2019 Income of xx and YY for DCRG and CVP respectively from Government on 27/03/2019 and 29/03/2019. Amount was credited to his account. As he died on 25th ,this should be shown in my ITR or his ITR ? Should this be shown as exempt income as he was Govt employee ?

    2. There is Arrears added to his account on 02/04/2019.What i suppose is Arrears will be taxable. So Do i need to file this income in AY 2019-20 in his ITR or i should show this as my income in AY2020-21 ? or i should file his ITR once again in AY2020-21 ?

    3. His one Bank account was closed and sum was transferred to my account on 05/05/2019. Interest income till that time should be considered in whose ITR and in which AY ?

    4. He is entitled to get Arrears of 7th pay commission , a sum of 50k each year by State Govt . Do i need to file ITR on his behalf every year? Can legal heir submit ITR for his parent for more than one times ?

    5. His leave encashment will be credited to my bank account in future. On whose name i should file ITR for this ?

    6. I do not have all the documents needed to be accepted by Income tax department to be considered as Legal heir of my father. Should i still go ahead and file the ITR as deadline is approaching ? what if i file defective return ?

    Reply
    • Dear Karan,
      1) In his.
      2) It his.
      3) If it is an inheritance, then no tax liability on you.
      4) No, it should be in your name.
      5) In your’s
      6) Yes.

      Reply
      • 1. That income is added after his death. Is it fine if i fill that in this year itr?

        2.There is Arrears added to his account on 02/04/2019. Income tax for that arrears should be filled in which AY year ?

        3. Interest earned by him after his death should be included in whose ITR and which AY?

        Few doubts

        Will i be allowed to file his ITR in AY 2020-21 ? Please note that he was died on 25/03/2019.

        Reply
        • Dear Karan,
          1) Yes.
          2) The FY where you received it.
          3) Up to that particular FY, it is his income.
          4) NO. For FY 2018-19, AY is 2019-20. Hence, you can’t file his ITR for AY 2020-21.

          Reply
  6. If Wife received arrears of salary of her husband after his death. Her husband is a govt. bank employee and bank has issued Form 16 in her name and deduct TDS on salary arrears in her Name. Is Arrears of salary are taxable as wife’s Income or she has to file ITR as a legal heir of Her Husband? Can she Claim Sec. 89 relief also?

    Reply
      • Can she claim relief under sec 89 also ?
        Form 16 issued in her name then also ITR would be filed by her as legal heir.

        Reply
  7. Hi Sir,

    My grandfather had a land, when he was present he sold the land..now he is passed away.

    Land was sold in 2010.

    Now my father is getting a 143(1) notice about that land.

    Not sure what is the notice about.
    Even my father doesn’t know about that property
    Please help us sir.

    Reply
      • Hi Sir,

        My Grandfather sold a land in 2011 for Rs. 10 Lakhs but the Govt value was Rs.43 Lakhs. we are not sure whether he paid tax or not.

        In 2015 he passed away. Now my father got a call from income tax and they asked for address.

        Now my father got a notice under section 148 on 26-03-2019 after that he got another notice under section 142(1) on 11-06-2019.

        Now who is responsible to pay the tax, because my father was not involved in that selling process and we do not have any properties which inherits from my grandfather.

        Could you please suggest what we need to do and how can we close this issue.

        Thanks in advance.

        Reply
        • Dear Bhanu,
          If your father not received any inheritance from his father, then you just inform the status.

          Reply
          • Thank you sir,

            But how to approach to income tax. What is the format of replying to them.

            Please suggest

            Reply
  8. Sir my father died 10 mnths ago. He used to earn money from a fixed source. That source had been cut down TDS from that income. My father used to claim TDS return for every assessment year. My father paid TDS for the financial year 2017-18. As the legal heir can I claim the TDS return on be half of him ??

    Reply
  9. My brother-in-law passed away on 1 March 2018. My sister filed the deceased brother-in-law’s behalf ( being her wife), ITR for AY2018-19. She also submitted her own ITR separately, as usual.

    Certain interest income of my late brother-in-law from FDs & Sr Citizen Saving Scheme etc. still are being paid into his account , and also shown in 26AS statement of my late brother-in-law in Income Tax web site. My sister did not so far informed the banks formally.

    What should my sister do for filing ITR of my late brother-in-law for AY 2019-20? has she committed any thing legally wrong by not intimation banks in time?

    She can of course show add the interest earned by my brother-in-law’s FD & SCSS in her own ITR submission for AY 2019-20, but these interest figures are reflected in my late bro-in-law’s 26 AS data in I Tax web site?

    Kindly ADVICE. Would be grateful for your expert direction
    Rgds
    Prof A K Mitra

    Reply
    • Dear Ashish,
      First inform the banks regarding the death. Also, let she show the interest income in her.

      Reply
      • So grateful to you Mr Basavraj for such prompt expert advice from you. I shall approach you for advice if my elder sister faces any problem.Kind regards

        Reply
  10. My brother s son died intestate without any self acquired property or bank balance.He was running a business in which he incurred loss and owed money to many .He has also not filed any income tax returns all these years.is son is a student with no knowledge of the business accounts. Now the income tax department has served the assessment order for the year 2011-2012 with tax dues based on bank transaction s.No property is in the deceased name . Only a share is there in an ancestral property. Now what could be consequences and the tax liability of the legal heir?

    Reply
    • Dear Kannan,
      Let his son reply to it (with the help of guardian if he is minor).

      Reply
  11. Sir, If the assesse (Pan card holder) dies without paying income tax which was due, what is the consequences. if the assesse doesnot have any assets or their legal representativies also doesn’t have any income.

    Reply
    • Dear Srinivas,
      Then the legal heirs has to prove that there are no assets in the name of tax payer.

      Reply
  12. Hi Basavaraj,

    My father died on 2/9/2018, i have a basic question how should we treat allowances like Standard Deduction, i mean should we consider the whole Rs. 40,000 as allowance or prorate. He was paying a good amount as tax every year after investing (utilizing) 80C, One of the 80C investment is ICICI Insurance on my mothers name, which is due in December, can we pay it from my fathers cash balances and claim it in his return. – Thanks in advance.

    Reply
    • Dear Srinivas,
      Whether you are talking about standard deduction of Sec.80TTB? It is for full FY not on prorate basis. If he died already, then if you pay the premium, then it is a breach of contract and they may deny the claim. Hence, better to inform insurance company about death and claim it.

      Reply
  13. Mother and daughter, having equal share, sold land and the whole proceedings invested in separate Capital Gains Savings Accounts (SB A/Cs). Mother passed away before acquiring new asset. Can the daughter use mother’s CGSA along with her deposit to purchase a single property? Or can she withdraw the amount relying on CBDT circular 743, dated 6-5-1996 and use otherwise. But the bank will not close the deceased’s amount without ITO’s sanction and the ITOs are reluctant to give any order to that effect. They are asking for a court decision to support the claim ignoring the circular.

    Reply
    • Dear Nair,
      Once the sales proceeds are over, then the daughter has no rights to claim the mother’s amount blindly. It has to be distributed as per legal heir clause.

      Reply
  14. My father in law died in Dec 2017 without any will. His estate isn’t divided yet. He gets about Rs 7 lakhs as interest on FD and rest of the income is agricultural.

    No legal heir has been appointed yet there’s a disagreement on division of assets. In July 2018, the eldest son filed the IT returns without disclosing the death as if my father in law was still alive.

    There are 5 children as heirs and are named as nominees in the FDs separately. Will the interest income of father in law become taxable income of each of the heir and in what ratio? Or they become individually liable for the FDs for which they’re marked as nominee?

    Thank you

    Reply
    • Dear Ashtavakra,
      First let your in-law kids inform the bank immediately about the death. Also, you have to file IT return on BEHALF of in-law but not as your in-law.

      Reply
  15. Hi,
    My Father expired on Aug 2016 while he was still in Service with BSNL. We received IT notice in my Mother’s name on 23rd April 2018 (House wife)stating that you had filed for Returns in 2015-2016 for a sum of xx,However, we found that there was no returns filed for yr 2016-2017 Henceforth,Please file the IT returns for the aforementioned year along with last year returns(2017-2018) should your income exceeds 2.5L. Please advise me on how to go about this..
    My mother still didn’t start to receive Monthly Pension yet. She has received only LIC settlement less than 2 L for yr 2016-2017 then 5L Rs in 2017 as Father’s Leave salary and Provident fund.Would like to know if the death settlement for Govt employees is taxable in india? and as per my knowledge my father told me that all the taxes are deducted before payment by BSNL that’s y i am really worried.. Since i am working Abroad i don’t have in-depth knowledge about all Indian tax rules…

    Kindly guide me on who and how to approach to deal this matter amicably.

    Thanks and look forward to hear from you soon

    Regards
    Lenin

    Reply
    • Rama-She has to file IT return for FY 2016-17 showing her LIC income and also your father’s leave salary and EPF (all these are tax-free for her and hence just filing is enough no tax liability on her head). For FY 2016-17, she has to file the IT return on behalf of your father.

      Reply
  16. My father died in 2011. He is survived by his wife and 2 children – me and my sister. He was the owner of the flat in which I currently live.
    In 2016, I initiated the process of getting the flat transferred jointly in the name of all 3 of us, being the legal heirs. Now my mother and sister want to claim their share of the falt for which they have given 3 options for me to consider :
    1. Sell the flat and distribute the proceeds to all 3
    2. Pay them the equivalent value of their share and get the flat transferred in my name
    3. Pay the rent for the flat from the time of my father’s demise till date and continue to pay the rent till the flat is sold.

    I can’t consider the 1st option as I am not in a position to shift currently due to children’s education being in progress and can’t be disturbed.
    Option 2 also is not feasible as the amount of money is huge and I don’t want to spend that much money on an old flat (it is more than 35 years old). Raising this amount of money is also going to be a stretch and for no productive reason.

    What I would like to understand is if they can claim proportionate rent from me from the period of my father’s demise since neither was the house in their name at that time nor was there a rental agreement either with them or with my father for them to claim this amount in that period,

    Please clarify the legal position in the third option.

    Reply
    • Ramesh-I am not a legal expert in such family issues. Consult a lawyer of your choice.

      Reply
  17. In continuation of previous letter,the interest accrued out of FDs was Rs.80 thousand(apprx.)

    Reply
  18. After my retirement I gifted Rs.30 Lakhs to my wife in Dec2016 which was put as FD for our daughter’s marriage; my wife is a homemaker and her income is below 2.5 lakh so did not submit any return before. A few days back, my Mrs got a mail from IT asking submission of return for FY 2016-17 by 31.03.18 and also asking for details of investments. My wife submitted a return and claiming the invested money as gift from husband.
    Now my queries are:
    1. Is this gift recorded on plain paper with all the details carrying both of our signatures is ok for IT purpose?
    2. I understand now from discussion that I was mislead on tax liability on the interest accrued from the FDs of my wife out of this gift money as I was told the onus is on my wife. But I understand this perhaps should be clubbed with my income. And I did not pay tax on this income as it was presumed as my wife’s income. Being a senior citizen, I am tensed to what should I do now? Should I wait for IT department’s call? what should the worst implications? Please advise.
    Regards,
    Chanchal

    Reply
    • Chanchal-1) YES.
      2) Plese file the revised IT return by showing this income.

      Reply
      • Thanks for your reply. However when i tried to submit a revised return, it is not accepting as the processing is completed. What to do?

        Reply
        • Chanchal-First check your eligibility for revising the tax and then proceed.

          Reply
          • I am again approaching you for your kind advice: What is actually eligibility of revising the tax as you have suggested. How I will check it?
            My queries related to AY 2017-18 and I have already submitted my returns in July 2017, processing of which are completed as see in IT portal after log in. And My revised return is not being accepted (i tried on 30th ). I just want to get rid of this mistake by paying the required tax & penalty if required. Pl help. Sorry to repeated mails.
            Regards,
            Chanchal Chatterjee.

            Reply
  19. Sir my friend’s father passed away in 2012. He received a letter from IT department regarding the transactions made by his father in the year 2011 2012. He appeared before IT officials and they say that he will have to pay the tax plus penalty that was to be paid by his father. He was gifted property by his father and also he inherited some property . Is he liable to pay that tax or not as his father is deceased.

    Reply
    • Varun-Whatever the father’s income for that particular FY, your friend has to file IT return and pay the tax. There is no inheritance tax.

      Reply
      • Thanks for your reply sir.He was minor at that time and also the income was from sale of agricultural land but as you know people usually do registeries at govt rates.. so there is some amount which is unaccounted. Any guidance sir.

        Reply
        • Varun-Minor income be clubbed with parents. Please consult a tax expert of your area for a better guidance.

          Reply
        • Hello varun I want to your help if seen this msg please reply it..

          Reply
  20. Thanks for this information, Basavaraj, very helpful.

    My father passed away in Feb, 2018. He was a govt. employee and was receiving pension in a jointly held account with my mother where he was the primary a/c holder. He did not have any other investments in his name. I’ve already filed all the paper work with the bank to get the pension transferred to family pension in my mother’s name. But I’m waiting to remove his name from the a/c right now because the bank has not deposited the pension for the months of Jan, and Feb, they always run a couple months behind.

    I’m also working to acquire a legal heir/surviving member certificate in my mother’s name, and plan to file his IT return for the A.Y. 2018-19 soon after we receive it.

    I wanted to ask a couple questions:
    a. if it is essential for me to generate a digital signature certificate to file his tax return (assuming the assessing officer approves our application to act on his behalf, don’t see why they wouldn’t…). Generation of the DSC seems tedious, and I’d rather do the normal process if that is still an option for us.

    b. I’m afraid if I remove his name from the account now, the bank may not deposit the pension owed to us for the months of Jan and Feb 2018; and my mother would have to suffer a lot to get that money back from them. Also afraid if I don’t remove his name from the a/c, he will technically earn some interest in A.Y. 2019-20, and therefore we must file an IT return for the same. Please advice.

    Sorry for the long comment….thanks in advance, and keep up this good work.

    Sid

    Reply
  21. My father died in june 2017. I am aware that i can file his IT return for AY18-19.

    My question is, can i file his returns for the years thereafter also i. e for AY 19-20 ,AY 20-21 because he has certain time deposits which will mature in March 2020.

    Please clarify.

    Reply
    • Alok-You have to submit his death certificate wherever his income is about to generate and close those investments.

      Reply
  22. – My friend’s father died in FY 2016-17 and He filed the ITR as per normal procedure for AY 2017-18.
    – Both his father and mother was in government sector.
    – Now the employer said they will issue form 16 in the name of his mother instead of his father. Is it correct in part of employer ?
    – Also do his mother have the benefits of exemption limit upto 250000 in case of his father income and in her own income separately ?

    Thanks in advance for the guidance

    Reply
    • Sam-If the death occurred during FY 2016-17, then why they are issuing the Form 16 now? Also, it must be in the name of employee but not in the name of the relative of deceased.

      Reply
      • Thanks basavaraj…..Actually For FY 2016-17…Form 16 issued in the name of deceased….but now they are saying for FY 2017-18onwards…Form 16 will be issued in the name of his wife

        Reply
          • Actually His mother is receiving the salary by way of Pension which can be taxed as Income from other sources after providing the 15000 or 1/3rd of income whichever is least. But I need to know can we claim 250000 deduction on Father’s pension separately ?? Sorry if I am confusing the situation.

            Reply
            • Sam-If it is the pension income, then it is taxable income to his MOTHER and Form 16 should be issued in her name. Even commutation should be in her name only not in his father’s name.

              Reply
  23. My father died in September 2015. I filed his IT return (not as legal heir) for the AY 2016-17. He had taken out some tax saving FDs on which interest is generated and TDS is deducted by bank. Death certificate already submitted to bank. However as his total interest earned is very less, I did not file IT return for AY 2017-18. I received a notice from IT dept stating that I should file IT return for AY 2017-18 before March 2018. My mother is a legal heir. I tried to file the IT return for AY 2017-18 of my father through legal heir (ie my mother), I am getting message that I cannot file IT return for the AY beyond one AY with respect to date of death. In this case please suggest how to file IT return of my father.

    Reply
    • Ahuja-How bank allowed to run the FD in his father name in AY 2017-18? How they deducted TDS in his name, when you already informed them that he died. Let bank correct it.

      Reply
      • These FDs are tax saving FDs which cannot be closed before maturity. As income was generated in my fathers name, TDS is deducted in his name. They have not transferred these FDs in my mothers name though she is a joint holder. During FY 2017-18 interest generated on these FDs is around Rs 25000. Whether this income has to be clubbed with the income of my mother for filing IT return for the AY 2018-19 or IT return of my father should be filed separately (as a legal heir). How much deduction/ exemption I can claim for my mother.

        Reply
        • Ahuja-FDs can be liquidated if the investor dies (even in case of tax saving FDs). IT return of your father can be filed only up that FY in which year he died. Later whatever the income is there, it should be your mother’s income.

          Reply
  24. Mr.Basvaraj,

    My father died in June 2017. I have not been able to close certain FD’s in his name with banks and he will continue getting interest in FY 18-19 on these FD’s. Can i file his return for FY 18-19 as his Son?

    Reply
    • Alok-You have to inform the bank immediately and can be filed IT return for FY 2017-18.

      Reply
      • No my question is can i file his IT returns for FY 18-19 also. I will of course be filing is returns for FY 17-18 since he passed away in june 2017.

        Reply
          • He will have interest income for FY 18-19 on time deposits which i have not been able to get transferred in my mom’s name who is a nominee. Will the ITO not ask him to file a return for this income.?

            Reply
              • Despite my best efforts i may not be able to close all of them by 31/3/2018,Is there no provision whereby i can pay full tax of say 30% which would be the result if the nominee aquires the deposits.

                Reply
                • Alok-I am not sure what are problems in closing. But I am saying the rules.

                  Reply
  25. My grandfather had Fixed Deposit of 5 lakh. FD is in the name of him and my name as either or survivor. and these fd’s encash to my saving account. and I m salaried govt employee. when I file ITR V what happen

    Reply
    • Manish-Taxation will be under your grandfather as he is the first holder. Whether the bank deducted TDS in your name?

      Reply
  26. Hi,
    I need one help. My brother in law investing money in share market and he is died this year. After that all share and mutual fund I transfered to my sister account and her salary is also not more then 2.5 lakh. So when need to file income tax.if yes what are the document she required.

    Regards,
    Prashant
    8867460958

    Reply
    • Prashant-There is no tax liability on your sister part as she received all these due to death of your brother in law.

      Reply
      • Hi Basavaraj,
        I transfer all the share to my sister account and she sold all the share. She needs to give taxes on the share which she sold out.

        Reply
        • Prashant-Yes, if she sold the stocks and equity mutual funds within a year (Only on profit part which is at the price when she inherited to the selling price).

          Reply
          • Hi Basavaraj,

            I don’t know when my brother in law buy the share and buying share pricing also. How can I know that what is the buying prices. Which document I take it from broker to find income tax.

            Regards
            Prashant

            Reply
  27. It takes quite some time to get a Legal heir certificate from courts.. Like say 6 months
    So should I file the IT return before that or wait till i get the legal heir certificate?
    Please advise..

    Reply
  28. My father expired in 2014 October and as I was not ware of the income tax act on deceased, has not done any thing. As my father was an ex-service man, the bank has stopped pension to him and converted the same as family pension to my mother. As we are out of our native, we have not got any notice from income tax department. Now it has been understood that income tax is starting legal procedures against my father. Kindly inform how to clear the issue.

    Reply
    • Sunil-By following above procedure, better to file IT return.

      Reply
    • collect the following doc &file as normal individual assesse

      Collect all bank statements of a deceased IT payer.
      Collect Form 16 and 16a.
      This collection of bank statements and the Form 16 or 16A makes sure to tally the income.

      Reply
  29. Hello Sir,

    My friend’s husband passed away in the month of August 2017. He has filed his ITR upto AY 2016-17. He could not file his ITR for the AY 2017-18 due to his illness. Now, my friend wants to furnish his ITR as his Legal heir. I want to know if it is possible for her to file 2 returns for AY 2017-18 and from April 2017-August 2017 as his legal heir? Kindly help

    Reply
      • Thank you Sir. When should she file the return for the period April 2017- August 2017? Is it ok to file it next year as there are no forms available for the AY 2018-19 yet? Will there be any penalties for the delay as the assessee is no more?

        Reply
          • Thank you so much Sir.

            Reply
  30. E-filing website is not allowing to file income tax return for deceased after 1 assessment year from date of death, but for my father there were few FD’s where bank deducted the TDS as the 15H was not submitted in the last financial year.

    Please suggest how can I claim the return for TDS as the total income falls under 1 lak on PAN of my deceased father. I am already registered as Legal heir and also filed ITR in last AY year successfully without any issues.

    Reply
    • Anil-I think you have not updated your father’s death to the Bank. Do the same at the earliest. I think it is hard now to get that TDS back as more than 1 year completed.

      Reply
      • As the FDs were in joint name we did not took any action, but as the first name was of my father the TDS got deducted. Is there no way now to get the TDS back…please assist.

        Reply
  31. Hello Sir, Supposing if i have the login details and required website access and tax documents to file IT of my deceased mother , can i just file tax on her behalf using her login credentials instead of registering myself through the procedure said above? anyway i am the legal heir

    Reply
    • CS-It is wrong to file on her name as if she is alive. You must file the returns as her legal her.

      Reply
      • Thank you sir

        Reply
  32. MY DAD AND MOM USED TO HAVE A JOINT ACCOUNT , MY DAD WAS THE FIRST HOLDER , THERE WAS A FIXED DEPOSIT RUNNING INTO THE ACCOUNT AFTER HIS DEATH AS IT WAS A HIGHER INTEREST RATE.
    NOW WE ARE ASKING BANK TO CHANGE THE TDS RETURN AND HAVE SUBMITTED THE DEATH CIRTIFICATE. BANK IS NOT WILLNG TO CHANGE THE TDS RETURN WITH PAN ON SECOND HOLDER WHAT NEED TO BE DONE?

    Reply
  33. First holder of joint account in SBI deceased. Filed income tax return as representative last assessment year. Second holder is forced to continue the joint account as the account no has been given in some of the financial institutions for receipt of interest. SBI continue to deduct TDS but show against the PAN no which is not in existence now. What is the remedy without closing the joint account

    Reply
    • Sundara-They have to deduct TDS in the name of the second holder. They did wrong.

      Reply
      • Thank you. But how SBI has to be told to rectify this

        Reply
  34. The assessee died. The I.T. Department has issued notice u/s.148 for AY2013-14 after his death.. Whether legal heirs have to file income tax return in response to notice u/s.148????

    Reply
      • What if not filed??? what if legal heirs do not have enough documents????

        Reply
        • Murtuza-It is the responsibility of legal heirs to file. If IT Dept found any discrepancies, then it may initiate action against legal heirs.

          Reply
  35. Dear Sir

    Good morning

    What if Any person regularly filing return and he passes away , can we claim and Insurance from IT department for regularly filing return

    I just heared that IF any person regularly passess away his legel hierer should claim insurance on the basis of tax paid

    Please advice

    Reply
  36. I had invested in HDFC TAX SAVER MUTUAL FUND (DIVIDEND PAYOUT) IN THE YEAR 2008. IF I NOW SELL IT WILL IT ATTRACT CAPITAL GAINS if the sale ends up in a profiit (which may not be the case). With the money so realised from such a sale, can i invest the same again in a tax saving mutual fund for the current financial year and claim 80-c exemption?

    Reply
    • Krishnan-It is equity fund and your invested amount is more than a year. Hence, profit will tax-free income. Yes, you can invest the same for tax benefit.

      Reply
  37. An assesse filed his return of income for the AY 2014-15 and died in the FY 2015-16. The case was selected for scrutiny through CASS. From the record it is learnt that the assesse was unmarried. But from the different bank, it is observed that a niece withdraw a huge amount from the bank after his expiry producing probate.
    Please suggest me, how to complete the assessment and also inform whether the order will be passed in the name of assesse or nominee. Please provide, if possible, any format of such type of assessment order.

    Reply
    • Subhasish-Nomination will not give FULL rights over assets. Nominee just acts as a trust to transfer the asset to the LEGAL HEIR. I am not aware the full details of case of an individual. Hence, it is not right for me to comment anything. Better you consult a lawyer.

      Reply
  38. Respected Sir,

    My husband passed away three months back. He was working in Goa from 2009- 2015 and he has not claimed his TDS returns. He is born in Kerala and bought up in Goa. He died in kerala. Whether marrige certificate will suffice to claim TDS. If not where we have to apply for Legal Heir certificate. Whether I can apply for legal Heir certificate from my place tamilnadu. And whether we can get the returns for 2009 to 2015. I have form 16 A and what all documents do we require to claim for the TDS. And whether I can get the amount in my account.

    Thank you in advance.

    Reply
    • Riya-Yes, marriage certificate is enough to claim TDS. Contact any tax expert of your area in documentation and processing.

      Reply
  39. Dear Sir ,
    My father had invested in post office MIS scheme.The account was joint with my mother and myself.
    last year in Dec -15 my father died .My mother is also paralytic and can not sign.
    So last month in event of maturity of MIS after six year that amount was recd by myself through cheque
    Pls tell whether is there any tax liability on this or not

    Reply
    • Kumar-Yes, interest received on MIS is taxable to you and to your mother. Check who is first holder in that. Taxation is the responsibility of first holder.

      Reply
  40. Sir,
    My Grandfather died in 2008. He had some mutual fund which were in joint name of my Grand father, Father and mother. After the death of my Grandfather these Mutual funds got transferred in the Joint name of my Father and Mother.
    This year My mother got the notice in which IT department is asking for IT Returns of 2008-09. My mother is house wife and father is Retired and they do not file returns.
    Kindly suggest what needs to be done.
    Regards
    Saurabh.

    Reply
    • Saurabh-They both have to declare this income and file IT returns.

      Reply
      • Sir thanks for reply
        Is it possible to file the returns of 2008-09 now or they can file returns now for that income.

        Reply
  41. Hello Basava,

    My father died in 2015 May. He had not filed his IT return for 2014-15. Now ITO is asking me for the accounts and books of my fathers business which I do not have any more with me. Also, My father have not left anything for me and my mother to inherit. As per ITO, there is some tax liability of my father. But since I have not inherited any estate from my father so do I have to pay for his liabilities?

    Also I have informed ITO that I do not possess any books of accounts or documents of my father or related to his business. Do they have a provision of conducting raids for the documents and accounts books of my deceased father in my places?.

    ITO is calling me as a legal heir and if though I am a legal heir and my father has not left anything, then according to Section 159 of IT Act, I am not liable to pay any tax of behalf of my father. If this is so, then how my father’s file can be closed?

    Please advise.

    Thank You

    Reply
    • Apurv-They may or may not raid for cross verification purpose. But if he not left any asset for you, then how can you pay that? Just explain the same.

      Reply
      • Thank you sir for your prompt reply. Yes, actually my concern is this only that he has not left anything for me and my mother so in this case I am not liable to pay any tax liabilities of my father. So now when I also do not possess any documents related to him and his business which ITO suspects that I have, will Income Tax initiate raids on my places for my deceased father’s related documents?

        Reply
        • Apruv-It’s rare case or raid. But even if they initiate, then why you have to worry?

          Reply
          • Yes Sir you have right question that why I am worrying because of my Mother’s health. And if they raid she will be harassed while I will be off to work. Thank You

            Reply
            • Apurv-None can have right to harass your mother. If they do so, then you can directly complain in police station.

              Reply
              • Thank You so much sir for your valuable information.

                Reply
  42. Dear sir,
    Family of a member of All Gujarat Veterinarians’ Social Security Trust is paid Rs 6 lac on his death. All registered members contribute a fixed sum and an equal part is contributed by the Trust whose corpus is formed by membership fee. IT is paid by Trust on its income.
    Is the death benefit receivd so becomes a taxable income for the recipient family?
    Pl guide

    Reply
      • Thank you so much sir.
        I shall be obliged if you can provide me details about IT provisions under which this can be claimed tax free. Of course if it is convenient to you.

        Reply
        • Taunk-You have to show it in exempt income of your IT form.

          Reply
  43. is there any rule for the regular income tax payer ?
    if the tax payer dies in an accident what is the law or the rule for the government to compensate his or her family and if , what are that….?

    Reply
    • Pravin-Tax is the liability which an individual have to pay to Government. Why the IT Dept will compensate for the taxpayers death?

      Reply
  44. Is the PPF account deemed closed on event of Death? what if their is a need to deposit in the account to save TAX of deceased..

    Reply
      • Thankyou for your prompt Reply…

        Reply
  45. Sir, my husband working in Qatar Qafco company had expired.
    Me and my daughter received amount from the qafco company as gratuity.
    shoukd I have to pay tax for that ?
    He had some policies here in India which I received in my account .
    Is this amount also need to be taxed ?

    Reply
    • Madhu-Death claim of insurance and gratuity is tax free in India.

      Reply
  46. I m purchasing from e-
    commerce market like ebay,
    amazon, flipkart through my
    debit card is there any such
    kind of problem with tax i.e to
    pay tax because I m an undergraduate student. Infact I
    have no sources of income.
    Thank You Sir.

    Reply
  47. Dear, I am a journalist and running a monthly publication. My returns are up to date. But last year my wife died on 07/07/2015.
    I got 5 lack after her death in my account from LIC as a gratuity since she was an agent. But I paid more than that to various banks of which she had taken a loan.
    Tell me is there any liability to file any return on her behalf. And secondly since that amount has credited in my account and her liability is more.Shall I pay any tax on her income from my pocket?

    SAME QUERY I MADE UP. PL., NEGLECT IT.

    Reply
      • Thanks a lot sir. Got your message “Gratuity on death is TAX FREE.
        Now Q. 2. Any how other income such as commission or cheques on late wife behalf is being received in my account and that amount does not excess more that 2,500 then what the step I should take.
        May I add her income in my income and pay the tax as per normal norms. or do I have to file separate return for her.
        What about her 3-4 banks loans. May i cut it from my financial year profit.
        pl. help.

        Reply
        • Sharad-For the FY where death occrued, you have to file the IT return in her name as I explained above. From next year onward, it is your income.

          Reply
  48. This is a complicate case. My Father worked in the state Electricity Board and was wrongly suspended and then dismissed from work for a period of 3 years. Then we fought the case and won. Court ordered to reinstate him into the service and pay the salary for the 3 years of dismissal and 2 years of suspension.

    But the electricity board did not pay the pending salary until 2012 (4 years after court judgement) and kept citing missing files etc. as reason. Actual reason is they wanted bribe. My Father did not budge but unfortunately the stress got to him and he passed away due to Stroke in 2012. Finally my mother got all the pending money in 2014 amounting to around 30 Lakhs (Salary for 3+2=5 Years).

    Now, regarding the taxation for this amount, some auditors say that since my Father has passed away before he got the arrears salary, there is no need to pay any tax. Others say that the tax will be calculated 30% of the full amount paid to my mother. But this is the arrears salary which would have fallen only into the 10% bracket if it was paid in those years. Now the amount is paid in full, so it is not fair to pay 30%.

    Could you please suggest how to proceed now ? Thanks in advance.

    Reply
  49. Dear Sir,

    First of all, thanks for this useful post. I am not much knowledgeable of business and related legal systems therefore I need your help in settling down some tax related issues.

    I do not had much knowledge of the business of my father who passed away in January 2016. His business was of a general merchant and after his demise, we somehow got rid of all the stuff that we had in our store. Am I liable to pay taxes on the money that I got from that?

    Please also take the pain to explain me the difference between sales tax and income tax return in this case. I am very confused between these two terms.

    Your help will be very helpful. Thanks!

    Tanmay

    Reply
    • Tanmay-Yes, legal heir of your father will be responsible to pay the tax. Sales tax applies when you sales something and income tax applies when you earn something.

      Reply
      • So in my case, I earned from the sale of the remaining goods. So, if I’m his legal heir, do I need to give the government sales tax or the income tax?

        Reply
  50. Thank you for this blog. Since my family is in Kolkata, I have been following the advice of my Kolkata accountant. His office e-filed my mother’s 1915-16 Tax Return on May 11, AFTER my mother passed away on April 19. Consequently, I had to sign the hard copy which I mailed to Bengaluru on May 16. However, the PAN # used was my mother’s.

    How soon should I apply for legal heir status? Will I have to submit a separate IT Return next year for 19 days in April, 2016 when my mother was still alive?

    Reply
    • Jayasri-Yes, do it as soon as possible. Yes, 19 days income I think will not be more than Rs.2,50,000. If it is more then, you have to file IT return.

      Reply
  51. Dear Basu,
    My father recently passed away in second week of March. He had a small business and never filed returns. He died intestate. Almost all his savings are in jointly with my mother or my mother is nominee. My question is who will be responsible for IT returns ? As he never filed ago (my guess is, his income was taxable at least for last few years) will there be any proceedings against my mother ? Can my mother file returns on her own i.e. without being the legal heir ?

    Reply
    • Sanjoy-Let your mother be the authorized tax filing person on behalf of your father for the years where his income is more than minimum tax exemption limit.

      Reply
  52. My father died in Oct 2013. I filed his return on line for Ass year 14-15. Now I am getting automated reminders by e mail to file for Ass year 15-16. I am filing separate return for my mother .
    Who is to be contacted for stopping this .

    Reply
  53. my father is expired and I am not able to pay his tax and he did not make any will or not any property behind.
    So now i want too know what will bi the procedure for filling the income tax.

    Reply
  54. Dear Sir,

    My aunt passed away during 2015-16. She has no legal heirs. I used to help her to file her IT returns. Now, who should file the return?. Can I file it as a temporary legal heir. I am a joint account holder for her Bank Account. Please advise.

    Reply
  55. Dear Basu,

    If I register as a temporary legal heir for this year’s return then for the next year’s return can my status be changed to permanent or will it stay temporary?

    Also, I’m the third person listed as a legal heir in the will, hence can I file the return on behalf of deceased as the other 2 people cannot file as they are out of the country, is any procedure required?

    Thank you

    Reply
    • Keerti-From next financial year the asset will be the legal heir’s. So the respective legal heir must show the income generated from such asset. Yes, you can file the IT return.

      Reply
      • Thank you for the quick response!

        Also, the IT website asks for a registered will, I have an un-registered Will, will that be acceptable?

        Lastly, as per the will I was suppose to use the money for the medical expenses of a dependent who has past away, after which it would be distributed equally amongst all legal heirs. I have transferred it to my account and would be distributing the money in the near future. Is keeping the money in my account at the moment ok and what are the tax implications if any?

        Thank you

        Reply
        • Keerti-That’s OK. You being the nominee can keep the amount for future disburse. Because nominee act as a trustee.

          Reply
  56. 5 e) Notarized affidavit
    what is the format of the affidavit to be filed?

    Reply
    • Priyadarshan-It is simple format. You can get it from notary.

      Reply
  57. Sir,

    What to do in a case when the income is received in joint name and the TDS has been deducted in the deceased spouse’s name. Do we have to club the income and how to claim the TDS?

    Reply
    • Sonam-TDS will usually deducted in the name of first holder. If TDS has been deducted in the deceased spouse’s name, then it is her income.

      Reply
  58. sir
    my father passed away three mounth back . He had some fd in a bank. I would like to know whether the jointly held fd can be transferred to my mother’s name .if yes then what processor for tds of fd after death.how tds on fd deposit on account of my mother’s name?

    Reply
    • Pankaj-Yes, it can be transferred to survival account holder. Regarding process, check with bank. TDS and taxation will be on primary account holder for current year.

      Reply
  59. RESPECTED SIR,
    MY FATHER PASSED SOME MONTHS BACK.I FILED THE RETURN AS A LEGAL HEIR AS A BELATED RETURN.I DID NOT PAY THE BALANCE TAX FOR AY 2015-16.I HAVE MENTIONED IN THE RETURN ALSO THAT THERE IS A TAX PAYABLE FROM MY SIDE.HOW TO PAY THE TAX IN THIS CASE AND SHOW IT IN INCOME TAX RETURN.PLEASE HELP.I AM WORRIED.
    THANKING YOU

    Reply
  60. My mom files IT return every year and till Nov 2015 she had nil tax. After my dad died, she now has family pension + interest from all my dad’s FD (closed few days back due to death). She will have to pay tax this year. My queries are
    1. Is she liable to pay advance tax?
    2. The interest from my dad’s FD, will it be shown as part of her income or my dad’s?
    3. What do we do with already submitted Form 15H in bank for FD in her name?

    Reply
    • Sanju-1) Yes. 2) If her income for a year is more than the minimum exempt income, then she can’t submit the Form 15H. However, in your mother’s case it is unexpected. Hence, even if there is no TDS on some FDs, she can show it while filing IT Return.

      Reply
      • Thank you.

        I believe you have answered only 1 & 3. Can you please share your thoughts regarding query 2.

        Reply
        • Sanju-Up to Nov, 2015 it is your father’s income. Show and file as I explained above. After this, it is will be income of your mother.

          Reply
  61. Very informative, kindly inform that, I have purchased NSC VIII Issue for 5 year, whether the investment qualify for deduction U/S 80 C of income tax Act.

    Reply
  62. Thanks for the information provided. Really helps a lot. I have a question, In my case- For my dad’s death claims I recently got the PAN for my mother. She is not a tax payer. I also got the family tree certificate from the revenue department & affidavit . Is it only my mother who has to file tax or can I also file tax on his behalf ? My name is also present in the family tree certificate. I have been filing my taxes regularly & will there be any consequences if I file on his behalf and take the returns ?

    Thanks,
    Manjunath

    Reply
    • Manjunath-It is already discussed with Kirti. Please follow as I have suggested.

      Reply
  63. My father died on 10 may 2015. 2 month advance income tax debid on his salary of march and April
    How to refund this. And after his death which money got to my mother.Is This money taxable?

    Reply
    • Ashwini-Let your mother file the return on behalf of your father and claim the TDS.

      Reply
      • sir the TDS can be claimed in what section
        as the assess office of my client have disallowed the TDS which was his father but father but his father pass away

        Reply
        • Omkar-Let us say TDS was done of Rs.100. But your tax liability is only Rs.50. Then IT department refund the remaining Rs.50. There is no such special section to refund. Computation will be done automatically at IT Dept and refunded.

          Reply
  64. Please advice me from the new return forms which one to use for me and my wife.
    My income is from FDR interest and commission received from brokerage and for my wife is only FDR interest. our tax exempt income from PPF is over 10,000. Thanks.

    Reply
  65. sir, i am getting government pension besides that i am also getting bank interest. which new ITR form i have to use for submitting return. please inform me urgently. 2) my wife is a house wife. she is getting bank interrest only. which ITR form she has to use for subbing return. please answer 2 questions urgently. ramamohanarao .

    Reply
  66. Very informative post

    Reply
  67. What is this legal heir certificate and surviving member certificate? Under what conditions should this be applied for?

    Is an unregistered will not acceptable?

    Reply
    • Sushila-These certificates validate the relation you have with the deceased taxpayer. They just mentioned WILL, but not put any condition like registered or unregistered. Hence, I feel unregistered will be applicable.

      Reply
  68. Dear Basu,

    Thanks for feeding such an uncertain information.

    Would like to ask you some more information.

    What are the consequences if IT return is not filled in this circumstances?

    Is there any law to find and fine them?

    Regards,
    Kirthan

    Reply
    • Kirthan-If returns not filed then it be treated exactly like normal person missing the IT return filing. The penalty and other issues will be same. But in case of death of taxpayer, the responsibility transferred to legal heir.

      Reply

Submit a Comment

Your email address will not be published. Required fields are marked *

Share This