Tax Filing for Deceased Persons as Per Income Tax Act 1961
The loss of a loved one is never easy, and it can be even more complicated when it comes to handling their taxes. After all, tax laws and regulations can be complex and difficult to understand, especially when someone has passed away. However, it’s important to file taxes for a deceased person to ensure that their affairs are in order and that their tax obligations are fulfilled. In this article, we’ll go over the basics of tax filing for a deceased person as per the Income Tax Act of 1961.
- Understanding the Basics
Before diving into the specifics of tax filing for a deceased person, it’s important to understand the basics. When a person dies, their legal representative or executor of their estate is responsible for handling their affairs, including their taxes. This person will be responsible for filing the deceased person’s final tax return and paying any outstanding taxes owed.
- Obtaining a Death Certificate
The first step in filing taxes for a deceased person is to obtain a death certificate. This document is essential as it provides proof of the person’s passing and is required to carry out legal and financial affairs. The death certificate can be obtained from the local registrar of births and deaths or the municipal corporation.
- Filing the Final Tax Return
Once the death certificate is obtained, the legal representative or executor of the estate must file the final tax return of the deceased person. The final tax return covers the period from April 1st of the previous year to the date of the person’s passing. The tax return must be filed by July 31st of the year following the year of the person’s death.
- Determining the Tax Liability
The legal representative or executor of the estate must determine the deceased person’s tax liability for the final tax return. This includes calculating the income earned from all sources, including salary, interest, and capital gains. It’s important to note that any income earned after the person’s passing will be considered as income of the legal representative or executor of the estate.
- Claiming Deductions
The legal representative or executor of the estate can claim deductions for expenses incurred during the period covered by the final tax return. These can include medical expenses, funeral expenses, and any outstanding debts owed by the deceased person. However, it’s important to keep proper documentation and receipts to support these deductions.
- Filing the Return Online
The Income Tax Department allows for the online filing of tax returns, including the final tax return of a deceased person. To file online, the legal representative or executor of the estate must obtain a Digital Signature Certificate (DSC) or an Aadhaar-based Electronic Verification Code (EVC). Once the return is filed, the acknowledgement must be signed and submitted to the Income Tax Department. The return to be filed in the Income tax portal
- Paying Outstanding Taxes
If there are any outstanding taxes owed by the deceased person, the legal representative or executor of the estate must pay these taxes. The taxes can be paid online through the Income Tax Department’s website or at an authorized bank branch. It’s important to note that if the taxes are not paid, the legal representative or executor of the estate can be held liable for the unpaid taxes.
8. Tax filing of deceased Estate
While the tax filing of the deceased , till the date of death has to be filed the legal representative, the tax filing for the income of the Estate after the death has to be assessed separately in the capacity of Estate. The filings for the estate has to be done by the Executors of the will or the Legal heirs as representatives.
In conclusion, filing taxes for a deceased person can be a complex process, but it’s essential to ensure that their affairs are in order and that their tax obligations are fulfilled. By following the steps outlined above and working with a qualified tax professional, the legal representative or executor of the estate can ensure that the final tax return is filed accurately and on time, and any outstanding taxes are paid in full. It’s important to keep proper documentation and records throughout the process to avoid any potential legal or financial issues in the future.