Is money inherited after a parent’s passing taxable and how should it be reported in ITR?

When a parent passes away and the balance in a joint bank account gets transferred to the surviving holder, many taxpayers worry about the tax implications. Today's Ask Wallet Wise query decodes what the law says about inheritance, taxability and whether you need to report the amount in your ITR.

Moneycontrol's Ask Wallet Wise initiative offers expert advice on matters of personal finance and money. You can email your queries to askwalletwise@nw18.com, and we will try and get a top financial expert to address your queries.

I was a joint account holder with my father as the first holder. He passed away on April 23, 2025. Since I was the joint holder, the balance amount was transferred to me when the account was closed. What is my tax liability is for the money received and where do I need to report it in my ITR for FY26.

Expert's advice: Section 56(2) of the Income Tax Act taxes gifts received during the year if the aggregate value of all gifts whether in cash or kind exceeds Rs 50,000. However, there are exceptions. Amounts received under a will or inherited under personal law are exempt. Since India does not have an inheritance tax, the money you received after your father’s death is treated as inheritance and is tax-free, without any limit.