As deadline approaches, here's how to file I-T return of a deceased person

Failure in filing the ITR of a deceased person makes the heir liable to pay the penalty or fines. It may also lead to some penal consequences

Death settles all. Well, not in the case of income tax. Even after death, the tax liability of the person remains. The tax still needs to be paid on the income that is being received by the family on behalf of the deceased person, if it exceeds the basic exemption limit. Currently, the exemption limit is Rs 5 lakh per annum. 

If the ITR is not filed, the legal heir is liable to pay the penalty or fines. They may also face penal consequences. However, they are only responsible to pay the taxes or penalties to the extent of the money he has inherited.

The penalty to be paid by the heir depends on the tax liability of the deceased person. If the liability of the deceased falls in a higher tax bracket, then the heir may end up paying their entire share of the inheritance. 

For example, let's presume that a person received Rs 5 lakh from the share of the deceased person's property. The tax liability of the deceased is Rs 15 lakh. Legally, the heir will only be liable to pay a maximum of Rs 5 lakh as tax/penalty for the deceased. The personal money and property of the heir cannot be used to mitigate the remaining liability of the deceased.

Who is a legal heir?

The legal heir represents the assets of the deceased person. He/she is declared as a legal heir either by the registered Will or by a court. The registration can be done on the income tax department's (I-T department) portal. Here are the documents that are accepted as legal heir certificates:

• Legal heir certificate issued by the local revenue officer.
• A certificate by the court of law.
• A certificate of the surviving family members issued by the local authorities/ Municipality/ Nagar Palika.
• Registered will
• Letter issued by the banks on their letterhead, certifying that the person is the legal nominee of the deceased.

How to register as a legal heir on I-T Department's portal?

• Go to the official I-T department's portal
• Log in using legal heir credentials
• Go to 'Authorised partners', then to 'Register as Representative' and click on 'Let's get started'
• Click on 'Create new request'
• Enter your personal details
• Upload the required documents like the death certificate, PAN Card of the deceased and the legal heir certificate.
• Click on 'Proceed' and then 'Verify the request'
• Click on 'Submit request'
• You will receive an acknowledgement receipt from the I-T department.

Now, after the request is approved. The legal heir can file the ITR with the help of a chartered accountant (CA) or by themselves.