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Paying Taxes on Behalf of the Deceased

Under the Income Tax Act, the legal heir is liable to pay tax on behalf of the deceased person

Is the tax return required to be filed for FY2013-14 for a salaried person upon his/her death in FY2014-15, by the surviving family? How can receipts by nominees be incorporated in his/her tax return? Please guide.
- Vaishali Apte

As per Section 159 of Income Tax Act, the Legal Heir of deceased will be liable to pay tax which otherwise the deceased would have paid had he been alive. The legal heir will be responsible for filing tax returns on behalf of deceased person for the particular previous year. There is full provision to file the returns online. Go to www.incometaxindiaefiling.gov.in. Visit Help section on top right hand corner of the page to find full procedure to register as a legal heir and file income tax return on behalf of deceased.

The tax treatment of different assets inherited by nominee varies. For an instance, Shares, Mutual Funds, Property, Gold or any capital asset are not subject to any tax upon inheritance however, tax liability will arise at time of sale of these assets. In case of fixed deposit, interest from the date of death to maturity will be added to successor's income. Any proceeds from Life Insurance, PPF or Senior Citizen Scheme are tax free.

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