They say, nothing in Life is certain except death and taxes! There are taxes and legal formalities involved even after death such as transfer of property, distribution of assets, filing of returns and other cumbersome procedures.
All these formalities have to be done by legal heir. However not everyone is aware about compliance of taxation matters. Here, we will discuss about filing Income-tax Return of a deceased person by his\ her nominee or legal heir. The concerned person is required to get himself registered as a legal heir on the website of Income-tax department to file the return on behalf of the deceased.
Income of deceased person shall be computed only up to his death. Whereas, return is filed for whole Financial Year.
Let us take an example: Suppose, the taxpayer dies on 20th August 2014, then the legal heir has to file his return for the Financial Year 2014-15 (1st April to 31st March) but income shall be computed from 1st April 14 to 20th August 14 only.
Procedure of filing Income tax return on behalf of deceased person by the Legal Heir
- Step 1 − LOGIN to e-Filing application and go to ‘My Account’ –> Register as Legal Heir.
- Step 2 − Provide the necessary details and attach a zip file containing the below mentioned documents. Note: The zip file attachment should not exceed 1Mb.
- Copy of the Death Certificate,
- Copy of PAN card of the deceased,
- Self-attested PAN card copy of Legal Heir and
- Legal Heir certificate** or Affidavit in presence of a Notary Public.
**Any of the following documents will be accepted as Legal Heir certificate.
- The legal heir certificate issued by court of law,
- The legal heir certificate issued by the Local revenue authorities,
- The certificate of surviving family members issued by the local revenue authorities
- The Registered Will
- The Family pension certificate issued by the State/Central government.
- Step 3 Click Submit.
- Step 4 The request will be sent to the e-Filing Administrator.
- Step 5 The e-Filing Administrator will verify the request and approve/reject as applicable. An e-mail is sent to the registered e-mail ID. E-Filing Administrator may approve as Temporary Legal Heir or Permanent Legal Heir, based on the documents uploaded.
- Step 6 One can view the status of his request by going to “My request” List tab.
- Step 7 On obtaining the E-filing Administrator’s approval, and after adding his/her PAN in the verification part in ITR form, the return of the deceased can be uploaded through Legal Heir’s login.
- Step 8-Then, Legal heir has to validate and generate the return (in XML format) and upload the same using self login.
Temporary Legal Heir/ Permanent Legal Heir
A person is treated as a Temporary Legal Heir when the person fails to submit any one of the five Legal Heir certificates mentioned in Step 2. The Temporary Legal Heir is allowed only to upload ITR/Forms and will not be able to access all other services, which includes add CA to submit audit forms (other than ITR) on behalf of the deceased.
A person is treated as a Permanent Legal Heir when the person submits any one of the five Legal Heir certificates mentioned in Step 2.
- The Permanent Legal Heir may file Income Tax Returns/Forms,
- View Status of Income Tax Return/Forms, ITR-V Acknowledgment and other proceedings,
- Add CA to submit audit forms.
Clarification regarding Liability of the Deceased Person
Tax liability, may it be advance tax or self assessment tax, must be paid out of the estate of the deceased. There is no liability to pay the taxes of the deceased by the Legal Heir from his own pocket. Thus, their liability is limited to the extent of value of estate of deceased person. Eg. – Mr. Albert dies and Mr. John is his only son. If tax liability of Mr. Albert worked out to be Rs.6,00,000/-, but value of property of Mr. Albert was Rs. 4,00,000/-. then in this case Mr. John cannot be held liable to pay more than Rs.4,00,000/- i.e. amount inherited from his father.
This is a small effort to ease filing of IT returns of deceased persons. We hope it will alleviate the complexities regarding the return filing in case of demise of loved ones.