Filing Income Tax Returns After Death: Legal Heirs Must Complete Tax Obligations

The death of a Taxpayer does not end their income tax responsibilities. Under the Income Tax Act, 2025, the obligation to file income tax returns (ITR) and settle any outstanding tax dues transfers to the deceased person's legal representative. Failure to comply can result in notices, penalties and complications in settling the estate.

As the ITR filing season approaches, families should ensure that the tax affairs of deceased relatives are addressed in a timely manner.

Who Can File the ITR of a Deceased Taxpayer?

Section 302 of the Income Tax Act, 2025, which corresponds to Section 159 of the earlier law, places the responsibility of tax compliance on the legal representative of the deceased.

A legal representative may include a spouse, adult child, parent, executor named in a will, administrator of the estate, or a guardian acting on behalf of a minor legal heir.

If the deceased left a valid will, the executor is responsible for filing the return and settling tax liabilities from the estate before distributing assets to beneficiaries. In cases where the deceased died without a will, legal heirs such as the spouse, children or parents may assume this responsibility under applicable succession laws.

How to Register as a Legal Representative

A legal heir cannot directly access the deceased person's income tax account. Registration as a representative assessee is mandatory.

To initiate the process, the legal representative must log into their own account on the Income Tax e-filing portal and apply under the "Authorised Partners" section. The application requires documents such as:

• PAN of the deceased taxpayer
• Death certificate
• Proof of legal heirship or authority to represent the estate

Once approved by the Income Tax Department, the representative can access the deceased taxpayer's account through their own login and proceed with filing the return.

Income to Be Reported

The ITR should include all income earned by the deceased from the beginning of the financial year until the date of death. This may include:

• Salary
• Pension
• Rental income
• Interest income
• Dividend income
• Other taxable earnings

Income generated after the taxpayer's death is treated separately.

If an executor has been appointed through a will, the executor must continue filing returns for the estate until distribution of assets is completed. In the absence of a will, income from inherited assets becomes taxable in the hands of the legal heirs and must be reported under their respective PANs.

Consequences of Non-Compliance

The tax department can issue notices and initiate assesSMEnt proceedings if returns are not filed. Legal representatives may also face late filing fees, interest charges and other penalties applicable under tax laws.

In cases where taxes remain unpaid, interest provisions may apply. For example, interest under Sections 234B and 234C can be levied when advance tax obligations are not fulfilled. These provisions generally impose interest at 1 per cent per month on the tax shortfall.

However, the liability of legal heirs is restricted to the value of assets inherited from the deceased person's estate.

Refunds May Be Lost

Failing to file the deceased taxpayer's return can also result in the loss of eligible tax refunds. If the prescribed deadline for filing a belated return is missed, any pending refund claim may become unavailable.

Early Planning Can Prevent Problems

Tax experts recommend identifying the legal representative early, collecting the necessary documents and completing the registration process on the income tax portal before filing deadlines approach. Timely action can help families avoid penalties, notices and delays in estate settlement.

Disclaimer: The article is for informational purposes only and not investment advice.