Who will file ITR after the death of husband or wife? Know what the income tax rules say

If a person dies and has not made a Will, the family faces many legal and financial questions. The biggest question is who will file the Income Tax Return (ITR) of the deceased and what will be the rights of the nominee present in the bank or demat account. According to tax experts, in such a situation the nominee does not become the owner of the property, rather he only plays the role of trustee on behalf of the legal heirs.

When will ITR of the deceased have to be filed?

According to the Income Tax Law, if the income of the deceased exceeds the prescribed basic exemption limit or he fulfills other prescribed conditions, then his legal heir will have to file ITR on his behalf. If the person had chosen the new tax system then the basic exemption limit is Rs 4 lakh, whereas in the old tax system it varies according to age. Apart from this, in some cases it may be necessary to file ITR even if the income is low, such as expenditure on electricity more than Rs 1 lakh or expenditure on foreign travel more than Rs 2 lakh.

What will happen without a will?

If the deceased has not left any will, his property passes to his legal heirs upon his death as per the applicable personal succession law. In such a situation, only one ITR has to be filed for the period from April 1 to the date of death. After this, the income from the property will be considered taxable in the hands of the respective legal heirs.

What is the difference between nominee and legal heir?

According to experts, having a nominee’s name in the bank or demat account only simplifies the process of transfer of property. This does not make the nominee the final owner of that property. The final authority always lies with the legal heirs and the distribution of property is done as per the relevant succession law.

Why is it important to file ITR on time?

Tax experts say that if it is necessary to file ITR in the name of the deceased and this is not done, then there may be tax notices, delay in refund or other legal problems in future. Therefore, the legal heir of the family should register himself as a legal representative on the Income Tax portal in time and complete the necessary process.