Hi,
The facts of the case are as under:
The assessee, a resident Individual was a single child of her parents. Couple of years ago, her parent passed away and left everything to her in a will (it is not known whether the will is registered / probated). The parent was also a tax paying assessee and had owned movable and immovable property which was inherited by the daughter.
The parent was a 50% joint owner of an immovable property which was let out during her life time. The property is still letout. Tax deducted from the rent paid used to be claimed as refund in the Income tax return filed. Rent received used to get deposited into a saving account jointly owned by the co-owners, taxes and other expense incurred were paid and the balance amount was withdrawn by the owners in equal proportion.
Due to some technical reason it has not been possible for the daughter to get the property registered in her name. Due to this, the rent is still being received in the name of her late mother and being deposited in the joint saving account. The daughter has been filing a return in the name of her mother and claiming the TDS as refund in the same. Only other income shown is bank interest earned. The daughter is also filing her own income tax return and paying tax on the income as per normal slab rates.
My queries are as under:
1. The rent received by her late mother has been accumulating in the saving account in the last few years. Can the joint owner issue a cheque from such account in the name of the daughter?
2. What documentation should the co-owner need to obtain from the daughter to safe guard herself from any future liability? Are there any specific documents listed in the Act with this regards? (Please provide a draft format for the same if available)
3. Will the daughter have to pay any tax e.g. income tax / inheritance tax / any other tax (please specify) on the above amount received? Is this amount an income in the hands of the daughter?
4. Are clubbing provisions u/s. 64 applicable in this case? If yes, under what section will the daughter have to show the property income?
5. If the income is required to be shown as income of the daughter, can she claim the TDS deducted in her mother’s name while filing her own return of income? If no, how will she be able to get refund of the same?
6. Do we need to inform about the death of the assessee to the Income Tax department? If yes, how?
7. Can the income be shown in the name of the late mother and a separate return filed for claiming the refund?
8. Is there any way to file an e-return as a legal heir on the income tax website? If yes, please inform how can we do the same?
Request your replies on the above queries. Please free to add any other important point to be considered / taken care of / documents to be maintained in the above scenarios.
Thank you all in advance,
Sincerely yours,
CA CSJ
CAclubindia
