Saturday, July 1, 2023

Income Taxable in the Hands of Other Person - ITR Made Easy Asst Year 2023-24


Income Taxable in the Hands of Other Person

Income of Minor Child from Skill-based Competition

·         If your minor daughter has earned an income of Rs. 10,00,000 from participating in a skill-based competition, she is not required to file an Income Tax Return (ITR) for the concerned year.

          Generally, any income earned by a minor child is added to the income of the parents and subject to clubbing provisions.

          However, if a minor child earns income by utilizing their skill, talent, or specialized knowledge and experience, such income is exempted from clubbing provisions.

          In this case, the income earned by your minor daughter will be assessed separately through her guardian.

          To comply with the requirements, you need to apply for a PAN (Permanent Account Number) on behalf of your daughter using Form 49A.

          After obtaining the PAN, you should register yourself as her representative assessee on the e-filing portal and file the ITR on her behalf for the relevant Assessment Year.

          The PAN application for a minor child should be filed and signed by a representative assessee, and details of both the minor and the representative assessee should be furnished.

 Income Received on Behalf of Deceased Father

·         If you have received income on behalf of your deceased father in your account during the year, the taxation of such income depends on the circumstances.

          In case your father passed away without leaving behind a will (intestate), his estate immediately devolves to his legal heirs as per the applicable personal law.

          Therefore, any income accrued or received by your deceased father from the date of his death until the last day of the financial year will be considered as income of the legal heir.

          As the legal heir, you are required to disclose this income in your Income Tax Return.

 Filing ITR for Income of Deceased Person

·         In the case of Mr. X, who passed away on 13-10-2022, filing an ITR is necessary for the relevant year based on the following obligations:

 Income accruing before the death of Mr. X: The legal representative of Mr. X is required to file the ITR in his name under his PAN. This includes filing the ITR for the salary income of Rs. 12 lakhs received by Mr. X before his death.

b.     Income accruing after his death: Since Mr. X did not prepare a will, the legal representatives (i.e., the legal heirs) are required to file the ITR in their personal capacity. The interest income accrued after Mr. X's death will be added to the income of the legal representatives or legal heirs and disclosed in their respective ITRs.

 Filing Return as a Legal Heir with Mandatory DSC


·         A legal heir has the authority to file the Income Tax Return (ITR) on behalf of the deceased assessee, even if a Digital Signature Certificate (DSC) is mandatory.

·            To file the return as a legal heir, the person needs to obtain a DSC in their own capacity.

Procedure for Filing Return as a Legal Heir

·         Register as a Legal Heir: The first step is to register as a legal heir on the income-tax India e-filing website.

·         Provide Information: During the registration process, you need to enter the name, PAN (Permanent Account Number), and date of death of the deceased person.

·         Upload Required Documents: Upload scanned copies of the following documents in a zip file:

a.       Copy of the PAN card of the deceased person

b.       Copy of the death certificate

c.       Copy of legal heir proof as per the norms

d.       Copy of the Letter of Indemnity (optional)

 Verification and Approval: The Income-tax department will verify the request and, upon approval, grant access to the legal heir for carrying out all e-filing-related services on behalf of the deceased assessee.