When someone dies, their obligations do not end. When the deceased individual had taxable income in the previous financial year before passing away, the Income Tax Act requires an income tax return (ITR) to be filed on their behalf. Ignoring this can result in notice, penalty, or lawsuit for their legal heirs or representatives. The Income Tax Act treats the estate as a continuation of the deceased individual's tax history.
Who has to file the return and on what grounds
The ITR should be filed by the legal representative or heir of the deceased. He or she can be designated through a will or be appointed by a court of law. In the absence of a will, the legal heir could be the spouse, child, or immediate family member. The legal heir needs to register on the income tax portal through his or her own PAN and then request permission to act on behalf of the deceased PAN to file the return.
What are the documents needed to file the ITR
For filing the ITR of the deceased, the legal heir will require: the PAN of the deceased, Form 16 or income statements, investment details, TDS certificates, bank statements, and proof of deductions. Above that, a death certificate, proof of legal heir (like a will or succession certificate), and their own identity proof will be required to access file the return on the portal.
When to file the return and how it is processed
The refund must be submitted for the portion of the financial year during which the person was alive. For instance, if someone dies in December 2024, then his FY 2024–25 ITR will be April to December 2024. The due date remains the same as of normal persons—usually July 31 for those who are not required to get their accounts audited. In case there is a refund, it will be credited in the bank account of the legal heir.
What becomes of future income from the deceased's assets
Once the person is deceased, any income that is earned on his/her assets—like rent, interest, or dividends—is taxed in the hands of the legal heir or beneficiary who receives the assets. This income should be reported in the heir's ITR in subsequent years. The succession of tax burden from the deceased to the heir starts after the date of death.
Why prompt action protects from legal problems
Delayed submission or failure to meet the requirement may draw penalties, arrear interest, or prosecution under certain circumstances. Filing of the deceased person's ITR assures compliance, pays taxes in the proper way, and allows transfer of properties without future controversy.
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