MF LTCG TAX LIABILITY OF DECEASED PERSON

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If an individual initiates a mutual fund redemption before passing away, and the redemption date falls on the day of death, the capital gains tax liability falls upon the deceased person's estate. The legal heir is responsible for settling this tax, even if the funds are credited to a joint bank account after the individual's death.

Surajit Bhattacharya

Surajit Bhattacharya (Querist)
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19 February 2024 Say, a person successfully lodges mutual funds’ (equity) redemption request on 15-January-2024 at 8:00 am. This person dies on the same day at 11:00 am. The redemption amount is credited to the bank account of this person (his wife is the joint holder in this bank account) on 16-January-2024. Capital gain statement is showing that date of redemption is 15-January-2024. In this scenario, who is liable to pay tax on capital gains, the deceased person (by Legal Heir) or the surviving wife?