How can legal heirs of the deceased file income tax returns?

Padmaja Choudhury   /   April 18, 2022

It is surprising but true that a person is taxed even after he is no more. If a person at the time of death has earned income exceeding the threshold limit ( i.e. >INR 2,50,000), he is still liable to file an Income Tax Return (ITR). Are you wondering who will be accountable for this? Well, look for section 159 of the Income Tax Act.

According to section 159 of the Income Tax Act, the deceased person’s legal representative will be liable to pay any sum that the deceased would have been liable to pay if he had not died.

This section further elaborates that:

●      The legal heir/representative shall be deemed to be an assessee. The heir will be responsible for paying tax on income of the financial year from the beginning to the deceased’s date of death.

●      The liability of the legal representative is limited to the extent of assets inherited from the deceased. If the deceased’s assets are valued at, say, Rs1,00,000, and liability is Rs 1,20,000, then the heir will only be responsible for Rs 1,00,000. The legal heir is not liable to pay anything from their pocket. 

●   Before filing a return, the legal representative has to register himself as a legal heir of the deceased.

Steps to register as  a legal heir/representative of the deceased 

To file an income tax return of the deceased person, the legal heir/representative must get registered. To get registered, here are the exact steps to follow. 

Step1: Go to the government’s official website for e-filing of the return—login to the e-filing portal using the heir’s credentials.

Step 2: In the top left corner, under “my account”, choose “ Add/Register as Representative.”

Step 3: In the “Request Type” option, choose the “New Request” option.

Step 4: Next, select “ Register yourself on behalf of another person” for the option “Add/Register as Representative.”

Step 5: Now, click on the highlighted “Proceed” option at the bottom.

Step 6: For “Category to Register”, select the “Legal Heir” option. Then, click “Proceed” again.

Step 7: Provide all the necessary details asked. These are the PAN of the deceased, date of death, surname, middle name and first name of the deceased as per PAN.

Step 8: Select the files you wish to upload. These include a copy of the PAN card of the deceased, a copy of the death certificate, a legal heir certificate issued by the court/local authority or surviving member certificate or pension order or registered will, and a copy of the PAN card of the legal heir. 

Step 9: Put all the files in a zipped format and upload them by clicking the ‘Submit’ button. Make sure that the size of the zipped folder is less than 1 MB. 

Step 10: Wait for the confirmation message after submitting all the details. 

Approval of the registration process

The request of the legal heir to be registered will be sent to the E-Filing administrator for approval. The administrator will carefully verify the documents attached. Based on the authenticity of the files, the administrator will approve or deny your request to register as a legal representative.

If the request is approved, it signifies your request as the “legal heir” is accepted. Once confirmed, the legal heir can perform all the services as a “legal representative”. 

If the request is denied, the portal will display the reason for rejection. It may happen for several reasons, including filling in wrong information, uploading false documents, etc. 

If you wish to check your registration status, follow the exact first six steps mentioned above. Clicking on “Proceed” will give you the registration status, i.e. accepted or denied, and reasons if rejected. 

Filing of return as legal heir/representative

Once the registration process is successful, the representative can file ITR on behalf of the deceased. And, the return will be filed in the same way as a regular person. 

The legal heir would be required to verify the ITR. Verification can be done through two procedures. The heir can send a copy of the ITR acknowledgement to the central processing centre after signing it. Or, the representative may verify it electronically through OTP by registering their phone number.

It is important to remember that if a deceased person has any dues such as interests, penalties or tax dues, the legal heir would be responsible for paying the same. However, their liability to pay the pending amount is not unlimited. It is limited to the value of assets acquired from the deceased person.