• Notification Date: 21-11-2022
• Notification No: N/A

Step-wise Guidance to filing ITR for a Deceased Person: Income Tax

The legal heirs of a deceased individual are responsible for paying their outstanding taxes. In case of failure in filing the deceased person’s income tax returns (ITR) by the heirs, the latter may be subject to interest and/or penalties. 

As per the Income Tax law, the individual who is nominated for the decedent's possessions is considered to be their legal heir. The lawful heir is the one who has to bear the tax, penalty, fine, or interest that the decedent would have owed if he had lived. Those incomes that were derived from assets inherited by the legal heir from the dead that was generated after the date of death will be taxable in the hands of the heir and he has to report this inherited income on their personal tax return.  

Let’s discuss the step-wise process of Income-Tax filing that is to be followed by the legal heir:  

Step 1: You have to calculate the income of the deceased individual at first from the beginning of the year to the date of death. You must check all the bank statements, investment records, and other pertinent papers required for income tax calculation in case you are unsure of the exact income. 

Step 2: At first, the legal successor must register on the income tax portal under the "Authorized Partners" option as a representative assessee. The heir’s login credentials will be used to complete the login process from their account. 

Step 3: The legal heir has to submit the following documents to the income tax e-filing system to register themself as a legal heir. 

(i) Copies of the PAN of the deceased and the legal heir, 

(ii) A copy of the death certificate, 

(iii) A copy of any legal heir evidence, and 

(iv) A copy of the indemnity letter.  

 Step 4: The legal heir must make a fresh request by following the instructions on the portal. They have to upload the required files, and submit the request. After this step, the tax authorities will review the request, and therefore decide whether to approve it or reject it. The legally appointed heir will be permitted to file a return of income for the dead, after receiving confirmation from the tax authorities. 

Step 5: Once the request has been approved, all the services for the dead and the legal heir will be available. If the request is turned down, the rejection notification would be sent with a valid explanation.  

Step 6: After being authorised, the legal heir will be able to file the return. Then, the individual can file the ITR returns by following the standard procedures.  

Step 7: The tax return would be electronically verified using procedures like Aadhaar OTP, net banking, etc. The legal heir can validate it, sign the ITR Acknowledgement and send a copy of it to the Central Processing Center. 

Legal heirs failing to submit the decedent's ITR before the deadline may be subject to strict penalties for their failure to comply. They might have to pay fine under section 270A. The penalty might even be equal to 50 percent of the tax the taxpayer may have been able to save and/or a prosecution under section 276CC.