Managing taxes and inheritances after a parent’s death can be confusing—especially when there’s no will. Here’s a reader query on filing ITR and reporting income from undivided assets.
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My father passed away on 20th June 2024 without leaving a valid will. He left behind three children (two married sons and one married daughter) as legal heirs. Our mother had already passed away earlier. We haven’t distributed the assets yet, and we also haven’t been able to withdraw his PPF balance, bank FDs, or lodge the insurance claim. Do we need to file his ITR after his death? If we don’t distribute the assets for 10 years, how will the income be taxed, and are there any penalties for delaying distribution?
Expert Advice: In case of death without a valid will (intestate), succession is governed by the personal law of the deceased. For Hindus, the Hindu Succession Act, 1956 applies. Where the mother predeceased the father, the three children inherit equally. Legally, the assets vest in all legal heirs immediately on the date of death, irrespective of formal division.
From 20th June 2024, you three are treated as co-owners. Therefore, any income accruing thereafter (e.g., interest on FDs/PPF till closure, rent, etc.) should be reported in your individual ITRs in the proportion you agree (or equally, absent an agreement), even if the assets remain undivided.
You must file one final ITR for your father as his legal representative for the period 1st April 2024 to 20th June 2024 (income up to the date of death). After that, no return is required in his name because income thereafter belongs to the heirs. There is no income-tax “penalty” merely for delaying distribution; however, each heir must correctly report and pay tax on post-death income from the inherited assets every year. Non-reporting or delayed filing by heirs can invite interest/fees/penalties applicable to their own ITRs.
For operational matters, complete legal-heir registration on the income-tax portal, obtain the death certificate and succession proofs (or legal heirship/succession certificate, as needed), and update nominations/claim forms with banks, PPF office, and the insurer to enable closures/claims.
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