As per Income Tax rule section 159 , it is necessary to file tax return of dead person if liability incurred. It is the duty of the legal heir to file the tax returns of dead person or any one who claim the assets of deceased.
How Much Income Tax needed to pay by Legal Heirs ?
As per the Income Tax law the legal heirs are liable to pay the tax up to the extent of the assets held by the deceased. For an example if the tax liabilities of deceased outstanding is Rs 5 lacs and worth of assets is Rs 50,000, legal heirs is needed to pay the tax up to the limit of Rs 50,000/- i.e. legal heir to pay to the extent of the assets inherited. It is important to state that the liability would arise only till death afterwards income generated would be added to legal heir assessment. It is also to be remembered that if there is rental or interest income from the assets of deceased, it would be deemed to be the income of the legal heir in India.
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What happens if you do not file tax returns of the deceased?
If you do not file tax returns and there is a tax liability, there are numerous way the tax authority would penalized you. The major option are :
- The tax authorities could send a legal notice.
- The outstanding tax liabilities are to be recovered from the legal heirs up to the worth of assets.
- In adverse case the tax authority may auction the assets of deceased and recover the amount.4
What is the Process of filing income tax return for a deceased taxpayer ?
Follow the below mention steps to file the income tax return of deceased person through Income tax India website online.
Click to Read More : How To Fill Form 10 (E) For Income Tax Rebate on Arrears Paid ?
- First get the approval from Income Tax department for being the legal heirs.
- Documents needed to claim as legal heirs are PAN of the deceased assesses, death certificate and identity card if any.
- While filling Income Tax returns , legal heirs needs to specify on whom behalf the return is being filled.
- Legal heirs needed to have the access of digital signature which is required to be registered with the e-filing site of the income tax department.
- Thereafter, legal representative needs to intimate the details of the deceased individual such as name, PAN and date of birth along with his/ her details to the administrator of the e-filing website of department of income tax.
- The scanned copy of the death certificate of the deceased individual is also to be provided along with other details.
- On receipt of the details, the authorities cross-link PAN of the legal representative with the deceased taxpayer. Hereafter, legal representative can e-file return of the deceased taxpayer using his/her digital signature certificate.