The income tax return filing season is back! As we all know for individuals, the due date for filing a return is 31st July 2024 [for FY 2023-24]. Now when we say individual, it commonly means a living person but there is a twist to this as well.
The Income Tax Act requires a person, who is not alive anymore, to file an income tax return. You must be thinking about how a dead person can file his return. The answer is Legal Heir. As per law, a legal heir is required to file an income tax return on behalf of the deceased person.
There are different aspects when it comes to filing of ITR by a legal heir. Like the process for approval to act as legal heir, documents required, etc. But before we get into all those technicalities, we need to first understand the term Legal Heir.
Only the legal heir can file the deceased's income tax return (ITR) on his/her behalf for the income earned till the date of death. It's not straightforward, though. The heir must register as a representative assessee on the e-filing portal and subsequently ensure the registration of both the deceased's and heir's Permanent Account Numbers (PANs).
As per law, a legal heir is a person who inherits any asset/liability of the deceased. This definition is very subjective and the person who becomes a legal heir differs from case to case.
For example, there are 4 people in the family of Mr. Ajay Sharma Himself, his wife Mrs. Sharma, and their 2 minor sons Jr. Ajay & Vijay. Unfortunately, Mr. Ajay died on 20/8/23 and his income for the year till 20/8/17 was? 10,00,000. Now as per law, since he has a wife and children, all of them will become his legal heir. As Mr. Ajay's income exceeded the basic exemption limit, Mrs. Sharma will have to file his ITR as a legal heir because Jr. Ajay & Vijay are still minors.
If Mr. Ajay had not been married, then his parents would have become his legal heir. And if his parents weren't alive, then in such a case his brother/ sister (if any) will be his legal heir.
Step 1-
Login on the Income Tax portal using your PAN and Password -https://eportal.incometax.gov.in/iec/foservices/#/login
Step 2-
After logging on the portal, click on Authorized Partners on the main page. Under the authorized partners tab, click on register as representative assessee as mentioned in the screenshot.
Step -3
After clicking on Register as Representative assessee, the following page will appear. Click on let’s get started as mentioned in the screenshot-
Step 4-
After clicking on let’s get started, click on Create new request under active request tab as mentioned in the screenshot -
Step 5-
After clicking on new request, the following page will appear -
Step 6-
From all the options under category, select legal heir as the category and click on continue as mentioned in the screenshot-
Step 7-
After clicking on continue, fill in the details as mentioned in the screenshot and click on continue-
Step 8-
After clicking on continue, OTP will be sent to phone number and mail for verification -
Step 9-
After submitting OTP your request will be submitted successfully and will be processed by the Income Tax Department. You can click on View Request to view the request as mentioned in the screenshot.
Step 10-
After approval of the request by the Income tax department, the legal heir will be notified by email and SMS. The legal heir can login to the e-filing portal with its own credentials and after login, in the profile section he can switch to representative assessee (as legal heir). Screenshot has been attached for your reference-
The documents required to file ITR on behalf of a deceased person are as follows:
The size of the zip file containing these documents must not exceed 5 MB
Following completion of the legal heir registration process, your request will be forwarded to the e-filing administrator for examination. They will carefully assess the provided information and documents, ultimately approving or rejecting your claim based on its validity. After approval, you can access the full range of services available for both yourself and the deceased. If your request is denied, you will receive a detailed notification outlining the reason, which could include discrepancies in uploaded information or incomplete documentation. By understanding the rejection reason, you can take appropriate steps to address any issues and resubmit a more accurate claim.
Upon approval as a legal heir, you can file the deceased's tax return through the e-filing portal. Simply follow the standard procedure you would for your own return. Verification can be done electronically via Aadhaar OTP or net banking, or you can print, sign, and send the ITR Acknowledgement to the Central Processing Centre (Bengaluru).
The way to compute the income of the deceased person and of the legal heir is a bit different. Let us discuss it below:
| Income of deceased till date of death | This part of the income will be taxable in the hands of the deceased person as if he/she is alive. The return will be filed by the legal heir on his/her behalf. |
| Income after date of death | This income will become taxable in the hands of a legal heir. In other words, a legal heir should include this income in his total income and pay tax on it. |
The best way to understand this concept is through an example. Mr. Ajay Sharma earns income from 2 sources, rent of 60,000 p.m. and interest income of 20,000 p.m. Due to some unfortunate event, he died on 20th June 2023. Mr Ajay's legal heir is his wife Mrs. Sharma. The income of rent and interest earned by Mr. Ajay shall be bifurcated in a manner as follows:
START OF YEAR TILL DATE OF DEATH: ITR to be filed by Mrs. Sharma on behalf of Mr. Ajay.
| Rental Income (1/4/23 to 20/6/23) | ? 1,60,000 |
| Interest Income (1/4/23 to 20/6/23) | ? 53,333 |
AFTER DATE OF DEATH TILL YEAR END: Mr. Ajay's income will be included in Mrs. Sharma’s total income.
| Rental Income (21/6/23 to 31/3/24) | ? 5,60,000 |
| Interest Income (21/6/23 to 31/3/24) | ? 1,86,667 |
Now ITR of Mr. Ajay will include an income of ₹2,13,333 (his income is less than the basic exemption limit of ₹2,50,000, so in this case no ITR on his behalf has to be filed). ITR of Mrs. Sharma will include ₹7,46,667 in addition to her own income (if any). We hope that you can now easily understand how income is computed in such cases.
The department can start all proceedings against you which could have been initiated if the deceased person was alive.
It is important to note that, your liability as a legal heir can't exceed the value of assets that you inherited from the deceased. For example, say you have received ₹1,50,000 as legal the heir. Then you can't be asked to pay any liability exceeding ₹1,50,000 on behalf of the deceased.
We hope that after reading the above guide, you are aware of your responsibility as a legal heir. In case you face any issue, feel free to get in touch eCAs 24×7 for any assistance. Now you can also file your return online for free! Just visit us at Tax2Win. Happy Filing .
