When a family member passes away, sorting out their income tax return (ITR) is unlikely to be at the top of anyone's mind. But under Indian tax law, a person's obligation to file and pay taxes does not end with death. The responsibility passes to their legal representative or legal heirs, and overlooking it can lead to notices, penalties and delays in settling financial affairs. With the ITR filing season approaching, here's what families should know.
Who has to file
Under Section 302 of the Income Tax Act, 2025 (corresponding to Section 159 of the old Act), the legal representative of a deceased taxpayer has to complete their tax obligations, including filing the ITR and paying any outstanding dues. “The legal representative of the deceased is typically a legal heir executor, or administrator of the estate,” said Suresh Surana, Chartered Accountant and founder of RSM India.
Broadly, the legal representative can be a spouse, adult child or parent if the person died intestate, meaning without a Will. Otherwise, the executor of the will can file the ITR and pay any due taxes from the estate before it is distributed among heirs.
Where the legal heirs are minors, the responsibility falls on their natural or legal guardian. "The minor children themselves cannot independently discharge such tax compliances. In such situations, the natural or legal guardian of the minor child may act on behalf of the minor heir," said Surana.
The registration process
The legal representative cannot simply log into the deceased's e-filing account on the tax portal. There is a registration process that must be completed first to be authorised to file ITR on the deceased assessee's behalf.
The representative needs to log into their own account on the Income Tax e-filing portal and go to the ‘Authorised Partners’ section, where they can select the option to register as a representative assessee. From there, they initiate a new request by selecting the relevant category, such as legal heir, and submit supporting documents, including the PAN of the deceased, the death certificate and proof of legal heir status.
“Once the tax department verifies and approves the request, the legal representative can access the deceased’s account through their own login credentials. After logging in, the representative can switch to representative assessee in the ‘profile section’ and proceed with filing the tax return,” Akhil Chandna, Partner & Global People Solutions Leader, Grant Thornton Bharat, explained.
The tax return should cover all income, including salary, pension, rent, interest, dividends and any other income the deceased earned from the start of the financial year up to the date of death.
Income that continues to accrue after death, such as rent or interest, is handled separately. If the deceased left a will, the executor files returns on that ongoing income until the estate is distributed. If there was no will, the assets are divided under applicable succession law and the heirs report the income under their own PANs thereafter.
Penalties for default
The consequences of non-filing follow the rules as they do for any taxpayer. The tax department can issue notices, initiate assessment proceedings and impose monetary penalties, all of which will have to be handled by the legal representative. “All the penalties applicable to a regular taxpayer–including interest on delayed filing or tax payment, late filing fees and in some cases, penalties–would be applicable in this case as well,” said Chandna.
The consequences are not just limited to non-filing of ITR, but will also apply if the representative defaults on any tax payment on the deceased assessee's behalf. For instance, say there was advance tax that went unpaid due to death. In this case, interest under Sections 234B and 234C could apply. Interest under Section 234B applies when less than 90% of the total tax due has been paid during the year, while Section 234C applies when advance tax instalments are missed or underpaid across the four due dates. Both accrue at 1% per month on the shortfall and can apply simultaneously.
“The liability to pay such tax and interest would devolve upon the legal representative or legal heirs, limited to the value of the estate inherited from the deceased,” said Surana.
Not filing of tax return also runs the risk of missing refunds, if any. If the legal representative misses the belated return deadline of 31 December, the refund cannot be claimed.
The process, while procedural, is manageable with some advance planning. Identifying who will act as legal representative early, gathering the necessary documents and completing the portal registration before the filing season begins can prevent most of the complications that arise when this is left unattended.