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Home >Money >Personal Finance >Legal heir has to file income tax return on earnings of deceased

Death and taxes are inevitable. As weird as it may sound, even if a person has died, taxes have to be paid on his or her behalf if a tax liability exists. The legal heir of the deceased person is responsible for filing income tax return (ITR) of the deceased.

Many people have lost their loved ones due to covid-19. They should know that if they are the legal heir, it is their responsibility to file the ITR and pay any taxes due.

The ITR has to be filed if the income before allowing capital gains and other chapter IV deductions is above the minimum exempted limit. Apart from this, there are various other conditions under which one is required to file the ITR even if the income is below the exempted limit.

A person is supposed to file the ITR if he or she owns a foreign asset, has deposited more than 1 crore in current account during the financial year, spent 2 lakh or more on a foreign trip, or has paid electricity bills of more than 1 lakh.

Legal heir to file ITR: The legal heir is responsible to file the ITR within the due date. For any delay in filing, the legal heir may face consequences such as penalties or fines. “As per section 159 of the Income Tax Act, the legal representative of the deceased person is responsible to pay any sum that the deceased would have been liable to pay if he or she had not died," said Sudhakar Sethuraman, partner, Deloitte India.

Therefore, the legal heir or the legal representative of the deceased person shall be responsible for the payment of any penalty, fee or interest on non-filing or late filing of return of income. In case there is any error, the legal heir will be held responsible.

Therefore, utmost care should be taken in filing the ITR. One should be able to clearly calculate the income of the deceased.

“Income received by or accruing to the deceased person until the date of his death shall be considered the deceased person’s income. The legal representative shall file the income-tax return on behalf of the deceased person and pay tax accordingly," said Naveen Wadhwa, deputy general manager, Taxmann.

“Income earned after the date of death until the end of the financial year shall be considered income of the legal heir and shall be disclosed in his income-tax return," added Wadhwa.

However, in case there is an error in filing the ITR, the same can be revised later.

“If there is any error or omission in the original return, the return can be revised at any time three months before the expiry of the relevant assessment year or before completion of the assessment, whichever is earlier. Even the belated return can be revised and there is no limit on the number of times a return can be revised," said Wadhwa.

How ITR is filed: To file the ITR for the deceased, the legal heir will have to register himself as a “deceased (legal heir)" on the income tax filing portal.

Details such as the permanent account number (PAN) of the deceased, his or her first name, middle name and surname, date of death and bank account details of the legal heir will be required. Besides the PAN number of the legal heir, a copy of the death certificate and a copy of the legal heir proof will be needed.

Once you click on the submit button, the request will go for registration of the legal heir. After the registration, the income tax return can be filed.

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