Who have to pay?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2012 I have 3 questions:-
1. How to calculate tax on arrears of family pension recd to death employee's spouse in lumsum. Is sec.57 deduction also available on it?
2. A house in the name of assesse has died and his son do rental agreement with tenent of that house and tenent directly deposit rent in son's bank a/c(but this was not written in rental agreement), then this rental income will be include in son's income or his widow mother income?
3. If after death of his father, his son gets interest (directly deposit at his bank a/c) on loan paid by father without any agreements and/or proof etc. to someone then this income of interest will be take as son's income bcz his bank statement showing Or his Widow mother's income.
IN MY OPINION AS PER LAW AFTER DEATH OF FATHER HIS SPOUSE IS THE FIRST OWNER And THEN AFTER HIS SON, SO ALL ABOVE INCOME TO BE TREATED AS MOTHER'S INCOME AND SHE WILL LIABLE FOR TAX, NOT HIS SON AND DIRECT DEPOSITE IN SON'S BANK A/C SHOULD IGNORE.
Am I right or not?? Also explain tax treatement.
Thank You.

Amol S Joglekar

Amol S Joglekar (Expert)
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27 June 2012 A: yes sec 89(1) is available. B: Need to distinguish between INTESTATE succession i.e. without WILL OR with WILL. Accordingly it will be taxed under income tax.

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2012 Thank you Sir, there is not any will and also not go for making will and these income/items are arise in f.y 2011-12.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2025 Let's break down your three questions based on the facts — no will, father deceased, income sources arising FY 2011-12:

1. Tax on arrears of family pension (received lump sum) to spouse of deceased employee
Section 57(iia) of Income Tax Act allows a standard deduction of 1/3rd of family pension income.

When arrears of family pension are received in lump sum, tax benefit under Section 89(1) can be claimed to avoid hardship due to lump sum receipt.

So, yes — Section 57 deduction applies, and you can compute tax relief under Section 89(1) by filing Form 10E along with the return.

2. Rental income from house in deceased father’s name, rent paid directly into son’s bank account but rental agreement is with son
Since no will exists and property is under intestate succession, legal ownership passes to legal heirs as per Hindu Succession Act (assuming Hindu family).

Without partition or formal transfer, the property legally belongs to the estate, i.e. the deceased’s heirs — typically the widow and sons.

Mere receipt of rent in son’s bank account doesn’t mean rent is income of son.

Rental income should be treated as income of the legal owner(s) of the property, which in this case includes the widow (mother) and son as co-heirs.

For tax purposes, unless partition has taken place or property is transferred, rental income is clubbed as income of widow and son in their respective shares.

If rent agreement is in son’s name, it might complicate, but legal ownership is primary for income attribution.

3. Interest income received by son’s bank account on loan paid by deceased father to someone (no agreement/proof)
The loan was given by the deceased father; interest income arises after his death.

Without transfer of rights, interest income is deemed income of the estate and shared among legal heirs (widow and son).

Mere deposit in son’s account doesn’t confer ownership.

Income should be declared and taxed in the hands of widow and son according to their share in the estate.

Your conclusion about spouse being first owner is mostly right:
In absence of a will, widow and heirs become owners by succession.

Income from inherited assets is taxed in hands of heirs according to their shares.

Receipt in son’s account does not make income solely his.

Additional points:
It’s advisable to declare income proportionally by legal heirs.

Keep documentation of heirs’ shares for income tax filing.

If the son is receiving income on behalf of the estate, it’s better to account for this properly to avoid disputes or tax complications.

Summary table:

Income Type Taxable In The Name Of Relevant Law/Section
Family pension arrears lump sum Widow (spouse) Sec 57(iia), Sec 89(1)
Rental income from deceased's house Widow and son (legal heirs) Hindu Succession Act, Income Tax Act
Interest income on loan given by deceased Widow and son (legal heirs) Hindu Succession Act, Income Tax Act

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