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159(4) and 159(6) - urgent

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Akhil Kumar

Finance Professional

45 Points Posted on 16 April 2015

Section 159(4) says that a legal representative (LR) shall be personally liable to pay the tax liability of deceased if the LR disposes or creates charge or parts with the assets of the deceased . however the personal liability liability is limited to tax only but doesnt extend to interest, penalty etc.

If that is the case the LR's can dispose off the assets willingly to make money and pay the tax liability evading penalty or interest.

further 159(6) says liability u/s 159(4) is limited to estate of the deceased which is contradictory to the above provision.

I AM CONFUSED. PLEASE HELP ME INTERPRET THESE PROVISIONS WITH EXAMPLE.

Replies (1)

Shishir Nayak

(Expert)

369 Points Posted on 17 April 2015

Sec 159(4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with.

(6) The liability of a legal representative under this section shall, subject to the provisions of subsection (4) and sub- section (5), be limited to the extent to which the estate is capable of meeting the liability. B.- Representative assessees General provisions

Both the sec 159(4) and 159(6) saying same thing. Legal Representative liability is limited to the extent of value of asset of deceased