How much income tax should I pay on money received on death of my father?1 min read . Updated: 11 Sep 2020, 07:29 AM IST
After demise of my father, balance amount in his savings bank account got transferred to me in a new single account opened in same branch in my name.
My father had a Savings Bank Account with me as second holder. He passed away on 23 Apr 20. Since I was joint bank account holder with him, on closure of my father's bank account, balance amount get transferred to me in a new single account opened in same branch in my name. Please tell me what will be tax liability on me for such amount and where I do show the said amount in IT return for FY 20-21.
By Balwant Jain, Chief Editor, Apnapaisa
Section 56(2) of the Income Tax provides for taxation of gifts received during the year in case aggregate value of all the gifts, whether in cash or in kind during a year, exceed fifty thousand rupees. It is not the individual gift exceeding fifty thousand rupees which is liable to be taxed but the aggregate of all gifts received during a year are subjected to tax if the value exceeds the threshold. Please note that as long as aggregate value of all the gifts received during the year does not exceed the threshold there is no tax liability but once the threshold is crossed the full value of all the gifts become fully taxable without there being any basic exemption available.
Anything received either under a Will or as legal heirs is outside the scope of Section 56(2) and thus there is no tax liability for those who receive such inheritance. Since there is no inheritance tax here in India also, so the money received by you on death of your father is fully tax free in your hands without any limit. Please note that other legal heirs may ask you to give them their share in the money received by you in case there are other legal heirs entitled to inherit from you father in case he died without leaving a valid Will. Since the money received by you as legal heir is not an income, you are not required to disclose the same in the ITR to be filed by you.
(Views as expressed by the expert)