Here's how you can file ITR if you inherited the property

Benjamin Franklin says : "There are only two things that are certain in life:". But in this world, even death can not prevent a person from paying taxes. It's really hard to lose someone. If this truth was not bitter enough, the payment of taxes and the filing of the income tax added an insult to the injury.

After the death of a person, the legal heirs must go through legal compliance as the inheritance of the deceased property. tax declaration on behalf of the deceased, and so on. If the deceased had fixed badets, these are vested in the legal heirs. However, the income of such property or any other income earned by the deceased person during the year must be declared in the declaration of income produced by the legal heirs on behalf of the deceased person.

This article lists all taxes

Payment of tax on behalf of a deceased person

Pursuant to section 159 of the Tax Act 1961 on income, in the event of the death of a contributor, his legal representative is considered a contributor who is required to pay any sum that the deceased would have been required to pay if he had not pbaded away . However, the responsibility of the legal heir to pay income tax will be limited to the value of inherited property.

Calculation of the deceased's income

The income earned for a person who dies during the year must be split into two parts – Income earned before the date of death and income earned after the date of death. A legal heir must file a return in the deceased's name for the income earned up to the date of his death and the income earned thereafter from the inheritance must be considered the income of the deceased. the legal heir.

April 1 to the date of death is considered the deceased's income. However, the legal heir must file the tax return on behalf of the deceased and pay the tax accordingly.

Income earned after the date of death until the end of the fiscal year is considered income of the legal heir. must be disclosed in his personal tax return.

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Filing of Income Tax Return by Legal Inheritance

To file a tax return in the name of the deceased person, a person must first register as a legal heir on the e-filing website www.incometaxindiafiling. gov.in in the following steps:

Step 1: Go to https://incometaxindiaefiling.gov.in and log in to the account of the legal heir

Step 2: From the main menu, go to My Account> Add / Save as Representative

Step 3: On the landing page, you must select the relevant options from the drop-down lists, which are as under:

Request Type: & New request & # 39;

Add / S "Register as Representative:" Register in Another Person's Name "

Category to Register:" Legal Inheritance "

Step 4: Click" Proceed " And on the landing page, complete the following information:

Name of the deceased

PAN of the deceased

Date of death

Download the scanned copy of the PAN card of both legal and legal heirs legal, a copy of the death certificate and a copy of the certificate of the legal heir or of the registered will or family pension certificate or a letter issued by the bank confirming the name of the beneficiary on the bank account

. compressed folder. The maximum size of the compressed folder must not exceed 1 MB.

Step 5: Click Submit. After submission, you will receive a receipt from the department with a transaction ID

After completing the above process, the department will verify the request and once it is approved, the heir Legal may use all services for the deceased through his own E-Filing account.

After a successful registration, the legal heir must file the statement on behalf of the deceased. The legal heir must login to the electronic filing portal using his own identification information to download the ITR of the deceased person. At the time of the filing of the ITR, the legal heir will have the opportunity to choose the deceased's PAN from a drop-down list to download his ITR. It should be noted that in the tax return, the name of the person being badessed should be mentioned as <>. In addition, the legal heir should add his PAN in the verification part of the ITR form.

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Hereditary Property Tax

The Estates Tax was abolished in 1986.

Although there is no inheritance tax, however, there are certain income tax provisions that one should be aware of to understand the taxation of donations or inherited property.

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When a money or property is received by a person without consideration or for inadequate consideration, it is considered a residual income of the beneficiary. However, this provision does not apply to money or property received by will or inheritance. Therefore, the legal heir should not be subject to income tax on money or inherited property.

In addition, any transfer of an badet under a gift or will or irrevocable trust is not considered a transfer. purposes. As a result, the transfer of an inherited badet will not be taxable in the hands of the deceased.

Although no tax consequences come into existence in the hands of a legal heir or deceased at the time of inheritance, but a tax gain arises in the hands of one's family. legal heir in case of subsequent sale of inherited property. In this case, the actual cost of acquiring the property inherited from the deceased person should be considered the cost of acquiring the legal heir. When determining the period of ownership of the inherited property, the period of detention of the deceased person must also be taken into consideration.

Statement in Income Tax Return

The income tax return filed on behalf of the deceased person should be prepared in accordance with the following key points:

Only income earned from April 1 of the year. Fiscal year up to the date of death must be reported as income of a deceased person.

Transfer of property from the deceased to the legal heir by inheritance shall not be declared in the deceased's tax return, as this transaction is not considered as a transfer for the purposes of the capital gain.

Money or received by the legal heirs the inheritance shall not be declared in the tax return because paragraph 56 (2) x) does not apply to the money or property inherited.

Income earned from a property inherited after the date of death must be considered as the own income of the legal heir. It must be reported in the personal statement of the legal heir.

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If the total income of the legal heir, including the deceased's income after his death, exceeds Rs. 50 lakhs, the user is required to provide the details of all the badets and liabilities held by him at the end of the financial year in the Schedule AL. These details must include all badets and liabilities, including inherited property.

The sale of inherited property by the legal heir is taxable as a capital gain in the hands of a legal heir and must therefore be declared Capital Gains Annex in RTI forms

If a refund of a tax must be requested in the deceased person's tax return, it is advisable to fill in the details of the joint bank account as an appropriate measure to receive the refund amount. If there is no joint account and the legal heir completes the details of his / her bank account, CPC will ask the deceased's legal badessor to verify the details of his / her bank account. the legal heir. After verification, the CPC issues a refund on behalf of the legal heir.

PAN Card Discount

It is advisable to give the deceased person's PAN card after the submission of their last tax return and payment of taxes or receipt of a refund if any

(Co-authored by Naveen Wadhwa, DGM, and Dipen Mittal, Managing Director, Taxmann.com)