July 26 , 2013
If a taxpayer dies before filing returns his spouse or legal representative comes into picture. According to income tax law, section 159, the legal heir is liable to file tax returns of her deceased relative and clear any pending tax dues. Aspects relating to filing tax returns of a person who has passed away are discussed in this article.
Legal representative of a tax payer
The first question to arise could be who the legal representative is. Usually the widow or eldest son might be expected to take on the responsibility of legal representative. If the person left a will, the executor is responsible for acting for the estate.
Certificate of legal heirship can be obtained from the Tehsildar of your jurisdiction by submitting application in the prescribed form along with supporting documents. After basic verification by the office you get the certificate. This is the most informal way of doing this; this certificate has limited value otherwise. If there are multiple beneficiaries, the process can become a little complicated.
Responsibility of legal heir in case of death of a tax payer
After passing away, assets of the tax payer would belong to the legal heir and therefore she becomes the assessee for the deceased's income tax. Therefore she should file tax return of the assessee and pay up tax dues from the assets transferred to her. Her liability is limited to the value of assets of the deceased with her, so she does not have to clear tax dues from her own income or assets.
For any pending income tax assessment or reassessment the legal heir will be considered assessee and she will be liable to handle the proceedings. Income tax is to be computed in the same manner as would have been had the person been alive. Therefore all exemptions and deductions can be availed.
Since the legal representative is the assessee, any refunds would get credited to her account. Income earned after death would not be taxable to the deceased. PAN of the expired person has to be submitted back to the tax department.
Procedure of filing tax returns for a relative who has passed away
For filing tax returns on behalf of a deceased relative you would first have to register as the legal heir. The procedure is not complicated. You'd have to submit documents like death certificate, PAN of the deceased taxpayer, identity card and legal heirship certificate to the tax department after whose approval you can file tax returns on the deceased's behalf.
The process is detailed in Registering as Legal Heir for Filing Tax Return for the Deceased. In e-filing the legal heir files tax return through his registered id after first registering as legal heir.
Tax return of a deceased filed before passing away
If unfortunately a relative has passed away after filing tax returns the tax department should be notified about it. Income tax of a deceased person cannot be assessed. Moreover if there are any refunds pending, these will be credited to the deceased's bank account from where it cannot be recovered unless you are a nominee. So it is best to notify the assessing officer in such a situation.