Who is responsible to file Income Tax Returns?

• If a person dies intestate i.e., without writing a will, the estate left behind by him devolves on his legal heirs
• If deceased person make a will and an executor is being appointed, then the deceased person’s estate is taxed in the hands of the executor
• The executor shall obtain the PAN of the estate as well before filing of return
• Sec 159 provides for legal representatives shall be liable to pay any sum which the deceased would have been liable to pay

Intimation of the death of taxpayer –

Though, there is no statutory obligation, however it is prudent to register as legal representative or as executor on the income tax portal

How many Returns are to be filed? – 2 returns to be filed : 1st Till death and 2nd till end of FY . If income of legal heir including deceased person exceeds 50 lacs then assets are to be disclosed

Refund of Excess tax –

legal heir can claim refund which will be issued preferably in primary bank account of deceased taxpayer or joint account with legal heir and lastly personal account of legal heir after verification

Assessment cannot be made on deceased person and a fresh notice will be given to legal heir

Penalty proceedings of deceased person cannot be initiated on legal heirs (V P SHARMA AND KGC Verghese case) but continuation of penalty proceedings is accepted

Recovery of taxes – shall be from executor or legal heirs to the extent of estate of deceased taxpayer