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Property inherited after father's death: transfer options and tax implications for widow and son?

T S Khurana |91 Answers |Ask -Follow

Tax Expert - Answered on Aug 26, 2024

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Asked by Anonymous - Aug 06, 2024Hindi

My father died in FY 24-25 a 3 months back. A home in which I am living is in the name of my late mother and my late father and my wife. My queries are : 1. Now, only my wife is alive so, Is there any need to transfer the property in my wife's name ? 2. There is income from the rent of 2 separate floors, how this rent now to be shown and in whose ITR. Me and my wife also file ITR 2 currently. 3. My Father was getting the pension and filling the ITR for the same. Do I need to file his ITR as a legal heir or as a representative. 4. What need to be done to get his legal heir status. I am having 2 married sisters also. If you can reply serial wise I shall be obliged. Kindly state any other advise wherever required. Regards.....

Ans: I offer my opinion on your above questions, point wise as under :
01. First of all refer to the "WILL" of your Father & Mother. Their share should be transferred, in the name of the beneficiary of the WILL, may be you, your wife of anybody else.
02. Till the date of death, your father & mother are entitled to 1/3 RENTAL INCOME EACH.
03. You are supposed to file ITR of your Father & Mother, after their death, till the date they were alive, along with their all other Income, whether from pension or any other source. ITR should be filled by you as their legal heir/representative asessee.
04. Portion of rental income of your wife, shall be continued to be shown in her ITR.
05 When property share of your father & mother is transferred in the name of beneficiaries, they will be responsible to show this income in their ITRs.
06. If there is "REGISTERED WILL" property can be transferred in the name of beneficiary. If there is no "WILL" then the property shall be divided among all legal heirs equally. However, some of the stake holders may opt for having no share in the property.
Most welcome for any further clarifications. Thanks.

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Question by Biswatosh - Aug 25, 2022Hindi

With due respect and humble submission I like to take your kind suggestions on my query as under: 1. That Sir, through succession we the two surviving brothers likely to get bank deposits and marketable securities of equity like shares and MF of our deceased unmarried younger brother who died recently intestate. Under the above facts and circumstances please enlighten me whether we will have to pay income tax on the money received through succession and how we will show it in income tax return? Secondly, please inform how we will receive the money from the bank authority or from the depository participant so as to avoid future complications on income tax return. Thanking you.

Ans: There is no inheritance tax in India on the assets that one inherits. However, when a person dies intestate, the income shall be taxable in the hands of legal representatives (in this case you and your brother) after the date of distribution of the income.

Since the person has passed away without a will, all legal heirs (you and your brother) are entitled to get an equal share of his shares and mutual fund units. For this you will need to submit few documents.

It is a good idea for you to approach the respective financial institution for their process of transmission and you can follow it accordingly.

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