ITR for Deceased: Why is it necessary to file ITR of deceased persons? Know what the process is and who has to do it

There is a famous saying in English… ‘Nothing can be said to be certain, except death and taxes’. This means that nothing can be certain except death and taxes. Later, in 1789, American statesman Benjamin Franklin said about the US Constitution that it promises permanence, but nothing in this world can be called eternal except death and taxes.

Taxes are as eternal as death

Now you may wonder why literature is spoken of today? These things are not accidental. Currently, the season of filing income tax returns is going on in our country. Its deadline is not far. By July 31, 2023, you must complete this task in any case. The relevance of the above point is that if someone in your family has died during the last one year, you have to file their ITR as well. This may make you wonder why fill ITR of a person who is not in this world… But according to the rules you have to do so.

The law says that just as death is an eternal truth, taxes are also an eternal truth. If you come to this world, you definitely have to go. Similarly if you are earning or you have earned, you have to pay tax. In some cases it is not even necessary, but in some cases non-filing of ITR of the deceased can be a reason for action by the Income Tax Department.

In which cases is the return of the deceased required?

Let us now know what the Income Tax rules say in this regard… In the matter of filing the Income Tax Return for the deceased, first of all it is necessary to see what was the income of the person. If the income earned by the deceased during the previous financial year till his death is taxable income, filing of income tax return becomes necessary. Basic exemption limit can be included while calculating the taxable income.

How will the taxable income of the deceased be determined?

In the old tax system, the basic exemption limit for super senior citizens was Rs. 5 lakh, for senior citizens Rs. 3 lakhs and for general taxpayers Rs. 2.5 lakhs. In the new tax regime, the basic exemption limit has been increased to Rs 3 lakh from the financial year 2023-24. According to the age of the deceased, you can find the taxable income by deducting the basic exemption from his total earnings.

Who will file the ITR of the deceased?

If the deceased has a will, then the legal heir i.e. the legal heir has to file the return on his behalf. If there is no will, the spouse or any child can be considered as the legal representative and has to file the return. This arrangement means that if you are becoming the owner of the deceased’s income or property, you will also be responsible for his tax liability.

For how long will returns be filed?

Returns will be filed on behalf of the deceased from the beginning of the financial year to the date of death. Suppose a person dies on 30 November 2022, then for the financial year 2022-23, the return will be filed from 1 April to 30 November 2022.

What is the procedure for filing such income tax return?

To file the return, one has to go to the ‘e-filing portal’ of Income Tax and register himself as a legal heir. Login to the subsequent ‘e-filing portal’ with your user id and password. Then register as a representative in authorized partners and click Create New Request.

Which documents will be required?

Registration has to be done by submitting documents like PAN of deceased, death certificate, own PAN, bank account for refund, proof of legal succession, indemnity letter. After getting the approval from the Income Tax Department, the legal heir can file the return of the deceased.

How to fileITR of the deceased?

Now it is the turn to file the return. The legal heir has to file the return of the deceased in the same way as the return of the living person. Only in the general information section, the representative assessment option has to be selected.

What about post-death earnings?

The Income Tax Act states that the income from the beginning of the financial year till the death of the person will be treated as the income of the deceased person. Whether this income is from FD, shares or any property. At the same time, after the person’s death, the income from his estate will be the income of the legal heir. Even if the documents related to legal succession are received late. He has to show this income in his return. In case of a will, the executor has to file a separate ITR from the time the property is transferred to the legal heir after the death of the deceased. After filling the ITR of the deceased, he has to verify it.

What if ITR is not filed?

Now the question is what happens if someone in your family has died and you have not filed an income tax return for them… In fact, there are many disadvantages of not filing a deceased return. He will not get a refund if any tax has been deducted. Being a legal heir, you have to pay penalties and late fees on top of the tax due. If the return is not filed by July 31, there is a late fee of Rs 1,000 to Rs 5,000. The Income Tax Department may consider non-declaration of income as tax evasion. Under Section 276CC, if the amount of tax evasion is more than Rs 25 lakh, the punishment can be from 6 months to 7 years along with fine. In other cases, the punishment can be from 3 months to 2 years along with fine.

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