Deceased persons too need to file their income tax returns; we outline how

Income Tax Return filing deadline is still months away, but why to wait for the end moment?

As per the income tax regulations, the due date of filing income tax return for FY16-17 is July 31, 2017 for individuals, and September 30, 2017 for businesses.

There might be a case that somebody closer in your family died during the year and you have to file tax return on his behalf.

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Generally, people tend to think that ITR filing is not required for a deceased person simply because he/she does not exist anymore. But, this is not the case.

The first thing to remember is tax return of deceased person is to be filed by a "legal heir."

Chetan Chandak, Head of Tax research, H&R Block, said that under income Tax Laws Legal Heir/representative of a deceased person will be liable to file the tax return for the on behalf of the deceased person.

Who is a legal heir?

A legal Heir is an individual who receives an ownership or interest in the property or asset (viz. land, tenements, or hereditaments) of an ancestor who has died intestate (without will), through the laws of Descent and Distribution (i.e. succession act governing the decedent). In case of will the person who inherits the property of the deceased under the will be considered as legal heir.

After completing the whole process and once the requested is approved, you will be able to use all the services for yourself (Legal Heir) and for the Deceased through your account on the e-filing portal, Chandak explained.

How to register as legal heir?

If a legal heir is filing the ITR that he/she will have to  register himself as legal heir of the deceased person on the e-filing website https://incometaxindiaefilling.gov.in  of the Income Tax Department by uploading the relevant documents and information.

Process to register as legal heir is as under:

Step 1 - Login to e-Filing portal using Legal Heir Credentials
Step 2 - My Account > Service Request Type
Step 3 – Select Request type and Request Category – New Request and Add Legal Heir Request
Step 4 - Click on submit
Step 5 - Select the Type of Request – New Request
Step 6 - Enter the details of Deceased

• PAN
• Date of Birth
• Surname
• Middle Name
• First Name

Step 7 – Select the files to upload
Step 8 – Attach a Zip File with the below scanned documents

• Copy of the Death Certificate
• Copy of PAN card of the deceased
• Self-attested PAN card copy and
• Legal Heir Certificate or Affidavit in presence of a Notary Public

Step 9 - Click Submit

Once you submit the Legal Heir Registration request as above it will be sent to the e-Filing Administrator for approval. The e-Filing Administrator will verify the request and approve / reject as applicable.

Filing Process:

Once the Legal Heir Registration is successful you will be able to file the deceased person return as per below steps.

Step 1 Go to Income Tax Dept.’s Website – https://incometaxindiaefiling.gov.in
Step 2 Login to e-Filing portal using Legal Heir Credentials
Step 3 Go to e-File – Upload Return
Step 4 Fill the details and select the XML File

• PAN: Select the PAN of Deceased (Note: Dropdown list will show both PAN, Legal Heir as well as of Deceased)
• ITR Form Name: Select the ITR Form to upload (i.e. ITR 1, 2, etc….)
• Select Assessment Year
• Upload the XML File

Legal Heir can digitally sign the ITR of Deceased using his/her DSC

• Click Submit
• Select the e-Verify Option, as per your choice
• Download ITR-V (if not e-Verified) Verify and send the Signed ITR-V to the CPC center, Bangalore.

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Documents required:

• To file the return of a deceased person you will require bellow Documents/information:
• Copy of Death Certificate
• Copy of the PAN Card of the deceased
• Self-Attested PAN card Copy of the Legal heir
• Legal Heir Certificate.(As described below)
  • The legal heir certificate issued by the court of law
  • The legal heir certificate issued by the Local revenue authorities
  • The certificate of the surviving family members issued by the local revenue authorities
  • The registered will
  • The family pension certificate issued by the State/Central government

In any of the above certificate is in regional language, the legal heir is required to translate it into English/Hindi and duly notarized it before uploading.

The uploaded documents should be scanned in PDF format with 300 dpi. The zip file attachment should not exceed 1Mb.

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"As a legal heir, you have to file the return on behalf of the deceased for income earned from the 1st April of the financial year till the date of death. Any income earned after the date of death is taxable in the hands of the legal heir or executor of the deceased's estate. The returns have to be filed as if the deceased had not died, in the same manner and extent as the deceased did.

Tax liability

By section 159, the legal heir or representative is deemed the assessee. As such, s/he will have to pay taxes liable to be paid by the deceased, including advance tax and self-assessment tax. If s/he chooses not to file the return, the tax authorities could levy the same penalty as on the deceased. However the liability of the legal heir would be limited to the assets of the deceased which are or might come into his possession.

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So the PAN of the deceased will remain valid for some period and you will have to file a PAN surrender application to the income tax department once you submit the last return on behalf of the deceased person as his legal heir, Chandak added.