Income tax for deceased dependent

Filing an Income Tax Return (ITR) for a deceased person is a legal requirement if the deceased had taxable income during the financial year up to the date of their death. The legal heir (or legal representative) is responsible for this process.

Key Steps for Legal Heirs

1. Register as a Legal Heir:

   • You must register on the Income Tax e-Filing portal as a "Representative Assessee."

   • Procedure: Log in to your own account → Go to Authorized Partners → Register as Representative Assessee → Create New Request.

   • Documents Required: You will need to upload a ZIP file (max 5 MB) containing:

     • Death Certificate of the deceased.

     • PAN card of the deceased.

     • Self-attested PAN card of the legal heir.

     • Legal Heir Certificate (issued by a court or local revenue authority) or a registered Will.

   • The department typically processes this request within 7 days. Once approved, you can file the ITR on behalf of the deceased using your own login credentials.

2. Calculate Income:

   • The ITR should only include income earned by the deceased from the start of the financial year until the date of death.

   • Income earned from assets inherited by you after the date of death is taxable in your own hands, not the deceased's.

3. Filing and Verification:

   • You can file the ITR using the same standard forms (e.g., ITR-1, ITR-2) as you would for a living individual.

   • The legal heir’s PAN is used to verify the return, but the tax is computed based on the deceased's income and status.

Important Tax Considerations

• Liability: Your liability as a legal heir is limited to the extent of the assets inherited from the deceased. You are not personally liable to pay their taxes from your own pocket.

• Deductions: The deceased is entitled to all applicable deductions (e.g., under Sections 80C, 80D, etc.) for the income earned until the date of death, calculated as if they were still alive.

• Inheritance: Inherited money or assets are generally not taxable as "income" in your hands, as inheritance is considered a capital receipt.

• Payments: Certain lump-sum payments like life insurance proceeds (under Section 10(10D)) or specific ex-gratia payments are typically tax-exempt.

Summary: To file an ITR for a deceased person, you must first register as a "Representative Assessee" on the official Income Tax e-Filing portal by submitting the death certificate, PAN details, and legal heir proof. Once authorized, you file the return for income earned only up to the date of death, maintaining all applicable deductions, with your financial liability limited strictly to the value of the assets you inherited from the deceased.