Legal Heir’s Responsibility to file return of income and other important facts

Legal representative or legal heir means a person who in law represents the estate of the deceased person. Whereas legal heirs are those on whom ownership of property of deceased person is devolved upon by virtue of law. Are you aware of the procedures you need to follow as a legal heir after the death of a person regarding income tax? As income tax concern, there are many issues that trouble legal heirs after a person’s death. Whether you still need to file an income tax return after the death of the person? Do you close the file permanently at the IT department? Are gratuity and pension taxable? Filing of income tax return after death: As per section 159 of the Income Tax Act, 1961 (Act), even when a person dies, the assessment of his income is to be done upto the time of his death. So, the legal representative of the deceased has to file the income tax return for the income on which the deceased would have been liable to pay income tax if he had not died. The legal heir should also submit a copy of the death certificate of the deceased, and submit the Permanent Account Number Card (PAN Card) of the deceased. Advance tax payments and self assessment tax payments are also to be done by the legal representative. The tax is to be recovered from the estate of the deceased. Thus, all the legal heirs are liable upto the extent of the assets that they inherit. Taxability of family pension received after death: After the death of an Employee if there is any Family Pension received by the legal heirs of the deceased it will be deemed to be the Income of legal heirs and will be taxed under Income from Other Sources. Taxability of gratuity received after death: Gratuity received after the death of a person while in active service is fully exempt from tax. Gratuity received by the legal heir after retirement of the deceased is taxable under the head” Income from Other Sources”.

Leave a Reply

Your email address will not be published.