In the event of a taxpayer's death, the responsibility for tax matters, including tax payments, filing income tax returns, and handling assessments, is transferred to the taxpayer’s legal heir or representative. Below is a comprehensive guide detailing the procedures a legal heir must undertake to manage these obligations effectively.
Table of Contents
- Registration as Representative Assessee
- Accepted Documents for Legal Heir Proof
- Computation of Income
- Intimating Tax Authorities
Registration as Representative Assessee
To manage the tax affairs of a deceased person, legal heirs must register themselves as a Representative Assessee on the Income-tax Portal. The process is outlined in the following steps:
| Step | Action |
|---|---|
| 1 | Log in to the Income-tax e-Filing Portal using your PAN and password. |
| 2 | Click on the “Authorised Partners” tab and select “Register as Representative Assessee”. |
| 3 | Select “Let’s Get Started” followed by “Create New Request”. |
| 4 | Under “Category of Assessee who you want to represent,” choose “Deceased (Legal heir).” Provide mandatory details such as the deceased's PAN, date of death, and the reason for registration. |
| 5 | Attach necessary documents: deceased’s PAN card, death certificate, legal heir proof, and if required, additional documents such as a copy of the order passed in the name of the deceased or a copy of the Letter of Indemnity. |
| 6 | Proceed by clicking ‘Verify the Request’ and then submit for approval. |
| 7 | After submission, the e-Filing Admin will review the request. Upon approval or rejection, notification will be sent via email and SMS. |
Accepted Documents for Legal Heir Proof
Legal heir status can be validated with one or more of the following documents, which must be provided during the registration process on the e-Filing portal:
| No. | Document Type |
|---|---|
| 1 | Legal heir certificate issued by a court of law |
| 2 | Legal heir certificate issued by local revenue authorities |
| 3 | Surviving members certificate issued by local revenue authorities |
| 4 | Registered Will |
| 5 | Family pension certificate issued by State/Central Government |
| 6 | Official letter from a bank or financial institution confirming the nominee or joint account holder at the time of the deceased's demise |
Computation of Income
The computation of income for the deceased and the legal heir is as follows:
| Period | Taxable to |
|---|---|
| From the start of the fiscal year to the date of death | Deceased taxpayer (the ITR to be filed by the legal representative) |
| After the date of death | Legal representative |
During the transitional period, typically 2-3 months, where assets are being transferred to the legal heir’s name, income generated is taxable in the name of the deceased but filed under the legal representative’s PAN.
Intimating Tax Authorities
Informing the tax authorities of the taxpayer's death, while not mandatory, is highly recommended to prevent potential disputes or complications in tax assessments:
- Draft a letter to the Jurisdictional Assessing Officer with details like the deceased's PAN, the legal heir's PAN, death certificate, and legal heir certificate.
- Find the details of the Jurisdictional Assessing Officer under “Jurisdictional Details” after logging into the Income-tax e-filing portal.
By meticulously following these steps, legal heirs can ensure all tax responsibilities are met, thus avoiding any legal repercussions. This comprehensive approach helps maintain compliance and facilitates the smooth transition of fiscal responsibilities after a taxpayer's death.
