Losing a loved one is an extremely stressful and emotionally challenging process to deal with and it comes with a number of legal and financial obligations and responsibilities for the family. Among such responsibilities, one is the duty to file the Income Tax Return (ITR) of the beloved deceased person. As a legal heir, it is your legal duty to ensure that the deceased’s tax affairs are handled properly. Beleiv understands how challenging it can get to handle all these legal documentation and procedures amidst the turmoil one is already facing, and that is why we have come up with this blog to assist you throughout this journey.
In this detailed article, we will dive deeply into the procedure of submitting an ITR for a deceased individual in India. We will discuss the key tasks that a legal successor must fulfil, as well as the procedures involved throughout.
Who is a Legal Heir?
A legal heir is a person who is entitled to inherit the deceased person’s assets and obligations under the relevant and applicable personal laws. The rights and obligations of the legal successor are dictated by the faith, trust and customs of the deceased. Usually, a will is considered but In the absence of a will, the Indian Succession Act of 1925 directs the division of the deceased’s possessions among lawful successors that is legal heirs.
Obtaining Required Documents
The first step in filing the ITR for a deceased involves, obtaining the relevant paperwork that indicates their demise and your legal right to act on their behalf. These documents are as follows:
- Obtaining a Death Certificate:
The first step is to acquire a death certificate from the local authorities or the hospital where the deceased person passed away. The death certificate is an important document that formally registers the individual’s death and acts as a proof for notifying tax authorities about the individual’s mortality.
- Legal Heir Certificate:
You must get a Legal Heir Certificate from the appropriate authorities to establish yourself as a legal heir in India. This document validates your legal standing as the appropriate person to handle the deceased’s financial affairs, including submitting their ITR.
You will have to open an ITR account and register as a legal representative on the tax portal using your credential login details
Following this you will have to register as a legal heir by submitting all the important documents of the deceased including PAN death certificate and legal heir proof for approval
- Financial Data Collection:
Once you have all of the essential documentation, the following step is to obtain all of the deceased’s financial information. This includes the following:
- Bank Statements and Financial Accounts: Collect the bank statements of all bank accounts held by the deceased. This will aid in evaluating their financial activities and determining their income for the fiscal year.
- Investment and Asset Details: Gather information on the deceased’s investments, which may include mutual funds, shares, fixed deposits, and real estate assets. These particulars are essential for calculating the revenue earned by investments and other assets.
- Outstanding Dues and Liabilities: Identify and settle any outstanding taxes or liabilities that the deceased may have had before filing the ITR. Taxes owed might be paid from the assets left behind by the deceased.
Filing the Final ITR
After gathering all of the essential information, you can file the last ITR on behalf of the dead for the applicable calendar year. The steps below will walk you through the filing process:
- Reporting Earned Income: The deceased’s income is taxed from the beginning of the financial year till the date of their death. Include all revenue sources, such as salary, rent, interest, capital gains, and any other earnings.
- Claim Deductions and Exemptions: As the legal heir, you have the right to claim any eligible deductions and exemptions on behalf of the deceased person while finalising the ITR. These may include Section 80C investments, medical costs, charitable contributions, and others.
- Paying Owed Taxes: Before submitting the ITR, pay any outstanding taxes owing by the dead. The tax can be paid using assets left behind by the deceased.
- Verification and Submission: Ensure that all information on the ITR form is correct and completely filled. After checking the information, submit the ITR through the e-filing portal.
Maintaining documentation and Records:
Throughout the process of filing the ITR and resolving the deceased’s tax affairs, maintain comprehensive records of all operations, transactions, payments, and documents for future reference and adherence. This kind of practice will benefit you during tax assessments and any future tax-related concerns or inquiries.
Seeking Professional Assistance
Dealing with the tax affairs of the deceased can be complicated, especially if you are inexperienced or unfamiliar with the tax laws and regulations of the country. Seeking expert advice from a tax consultant or a chartered accountant may be very useful in navigating legal and financial complexities. Moreover, reaching out to a reputable funeral service organisation like Beleiv is beneficial for documentation procedures as well as guidance and compassionate services for all funeral-related endeavours.
Filing the Income Tax Return for a deceased is a major responsibility that lies on the legal heir. The legal successor can complete these task procedures efficiently, in accordance with tax regulations by understanding the essential procedures while getting the right guidance when necessary. Addressing this obligation with care and diligence will bring closure to the financial affairs of the deceased and ensure a smooth transition during this difficult period. As legal heirs, it is necessary that we keep ourselves educated about the taxation process adequately in order to commemorate the memory of our loved ones while adhering to the nation’s tax regulations.
Feel free to contact Beleiv for any assistance throughout the funeral procedures. We provide end-to-end services may it be related to documentation procedures or funeral rituals. We believe in offering compassionate services with the utmost respect and understanding with the intention of bringing some hope and light in this challenging period.