Income Tax Compliance After Death of a Person in India (FY 2025–26 Complete Guide)

When a person passes away, income tax obligations do not automatically end. Family members often face confusion regarding: Pending ITR filings Income earned before death Notices received after death Responsibility for tax dues This guide explai...

When a person passes away, income tax obligations do not automatically end.

Family members often face confusion regarding:

Pending ITR filings
Income earned before death
Notices received after death
Responsibility for tax dues

This guide explains exactly what compliances are required after death of a taxpayer in India, updated for FY 2025–26 / AY 2026–27.

Who Is Responsible for Income Tax After Death?

Under Section 159 of the Income Tax Act:

The legal heir becomes responsible for tax compliance
Liability is limited only to the estate inherited

📌 Legal heir is not personally liable beyond inherited assets

Key Income Tax Compliances After Death

1️⃣ Filing Pending Income Tax Returns

If the deceased:

Did not file ITR for earlier years, or
Passed away during the financial year

➡️ Legal heir must file the pending return(s)

2️⃣ Income Earned Before vs After Death

Period	Tax Treatment
Income up to date of death	Filed in deceased’s ITR
Income after death	Taxable in legal heir’s / estate’s hands

Examples:

Salary till date of death → Deceased’s ITR
Interest/rent after death → Legal heir’s I

3️⃣ Registering as Legal Heir on Income Tax Portal

Mandatory before filing ITR for deceased person.

Documents Required

Death certificate
PAN of deceased
PAN of legal heir
Legal heir certificate / succession certificate / Will

Portal Path
Income Tax Portal → Authorised Partners → Register as Legal Heir

Filing ITR of a Deceased Person (Overview)

Use PAN of deceased
Legal heir logs in using own PAN
Select “File on behalf of deceased”
Mention income up to date of death only

👉 Detailed Guide:
https://wondertax.in/blog/file-itr-deceased-person

Handling Income Tax Notices Received After Death

Types of Notices

Section 143(1) – Intimation
Section 143(2) – Scrutiny
Section 148 / 148A – Reassessment

📌 Legal heir must:

Respond within deadline
Attach death certificate
File reply on behalf of deceased

What About Outstanding Tax Dues?

Tax dues are recovered from estate assets
No recovery from personal assets of legal heir
Department cannot impose penalty beyond inherited value

Refunds After Death of Taxpayer

If refund is due:

Legal heir can claim refund
Bank account details of legal heir required
Form 30 / legal heir registration needed

Capital Gains & Assets After Death

Key Points

Inheritance itself is not taxable
Capital gains arise only on sale
Cost & holding period of deceased carry forward

Common Mistakes to Avoid

❌ Ignoring notices assuming tax ends on death
❌ Filing combined income incorrectly
❌ Not registering as legal heir
❌ Missing filing deadlines

How WonderTax Helps Legal Heirs

WonderTax assists with:

Legal heir registration
Filing ITR of deceased person
Handling notices & scrutiny
Capital gains & inheritance tax planning

👉 https://wondertax.in/services/plans/all-plans/tax-filing-and-advisory/income-tax-notice-response-handling
👉 https://wondertax.in/services/plans/all-plans/tax-filing-and-advisory/income-tax-return-filing

FAQs

Is it mandatory to file ITR after death?

Yes, if income before death exceeds exemption limit.

Are legal heirs personally liable for tax?

No, liability is limited to inherited assets.

Can income after death be included in deceased’s return?

No, it must be taxed in heir’s hands.

Can multiple legal heirs file ITR?

Only one registered legal heir can file per PAN.

Final Takeaway

Death does not end tax compliance — it transfers responsibility.

Proper handling ensures:

No penalties
No legal trouble
Smooth inheritance

👉 Handle tax compliance early to avoid future disputes.