Tax obligation in the event of income from assets after death without a will


Question: My father passed away a few years ago without a will, leaving behind three children (two married sons and a married daughter). Our mother had passed away a long time ago. We have not been able to allocate the assets between us to date. What are the consequences since we did not file an RTI for him after his death? We were also unable to withdraw PPF account balances and bank term deposits, nor to file an insurance claim with the insurance company. Can you please tell us how the income tax on the father’s assets would affect us if we didn’t distribute for, say, 10 more years? Are there tax penalties for delaying distribution? – Ramesh Chaudhary

Reply: In the event that a person dies without leaving a valid will, with regard to the property belonging to him, he is said to have died intestate to that extent. In the event of intestate death, the personal law of the deceased applies as to who will inherit the deceased’s property and how much. In the event of the intestate death of a Hindu, the succession of property owned by the deceased is governed by the Hindu Succession Act, 1956. In the event that no valid will is left by the deceased, all property is transferred. to the heirs immediately at the time of his death without anyone having to do anything.

In accordance with the schedule of the Hindu Inheritance Act, all three of you are entitled to an equal share of all assets belonging to your father, as your mother was not alive at the time of your father’s death. Since you all became the owners of the property immediately after the death of your father, the question of keeping the distribution of property in suspense does not arise and you should have included the respective income of the different properties in your tax return. on the respective income (RTI). You must include this income in your ITR to determine whether or not the assets have actually been divided among the beneficiaries.

Regarding your father’s ITR, you had to file an ITR for the period from April 1 of the year until the date of death as your father’s legal representative for income until the date of his death and thereafter, it is not necessary to file an RTI for income from assets belonging to your father since all the assets were vested in the legal heirs immediately upon his death. Since you cannot file an ITR beyond one year, you cannot file your old ITR now. In the event that the Income Tax Service becomes aware of it, it may issue you with a notice and in this case, you may have to pay taxes and interest on the income relating to your share in the patrimony of your deceased father in addition a penalty. between 50% and 200% of this tax payable.

Balwant Jain is a tax and investment expert and can be reached at [email protected] and @jainbalwant on Twitter.

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