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Inherited money

Tax queries 232 views 2 replies

My father died 4 years ago, and only now I have started settling his accounts etc. I have inherited funds from following:

* Bank accounts
* Securities: Sold and money transfered to my account
* Mutual funds: Sold and money transfereed to my account

My question is if this income is taxable? If yes, then how can i save this tax, or at least a part of it?

 

Replies (2)

According to section 159 of the Income Tax Act, 1961 (Act), if a person dies, then his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died

as per your question if you received any kind of amount from your father and amount is taxable not the bank account or saving account so you need to first pay tax on that amount then balance amount is yours.

like if your father was have a fd of rs. 100000/- or a ppf account and the fd is tax free fd and the ppf amount is tax free as per deduction u/s 80c then you are not liable to pay tax but you need to file of income tax return of your father income as an represetive.

other example if your father won a lottery of rs. 100000/- then as per income tax 30%  amount is taxable and this amount is paid to you after death of your father then you need to pay 30% tax on rs. 100000/-.  balance amount is yours.

Tax Liability of Dead Person – Who’s responsible?

Legal Heir is not responsible to pay income tax of the deceased from his own money. If there are tax liabilities of the dead person,legal representative  is  liable to pay income tax on behalf of the deceased. Advance tax payments and self assessment tax payments are also to be done by the legal representative. The tax is to be recovered from the estate of the deceased. Legal representatives would be personally liable to the extent of the assets to which they come into possession. Thus, all the legal heirs are liable upto the extent of the assets that they inherit.

Example: Shyam receives Rs. 50,000 after the death of their father. Tax liability of the father is Rs. 75,000, so Shyam can not be liable to pay more than Rs. 50,000 (the upper limit), as that is what he inherited from his father

 

Thank you.


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