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Mihir

Mihir Tanna  |580 Answers  |Ask -

Tax Expert - Answered on Aug 17, 2023

Asked by Anonymous - Jul 18, 2023
Money

hello Sir, My father died on 20th May 2022. As per rules getting death certificate took around 30 day and then started applying for closing his bank account ,fds etc. which took some time. As per AIS form (from income tax department) he has received interest in say month of july or august 2022 as closer took time. I will be filing income tax return for the last time as deceased heir. The interest which he has receive after 20th may 2022 will be considered as part of his income or i have to show as my income. Moreover he had LIC policy which was closed in dec 2022 the closer amount ( principal and interest) was credited to my account. The interest from LIC will be part of his income or my income as this is not reported in AIS form. Your early reply will be highly appreciated.

Ans: Interest income earned upto the date of death will form part of deceased income. Interest income earned from date of death till maturity/amount transferred to legal hair; will form part of legal executor (separate PAN).

Thus, in your case, The interest which he has receive after 20th may 2022 will be considered as part of his income. The interest from LIC will be part of your income.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Hardik

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Tax, Mutual Fund Expert - Answered on Jul 25, 2023

Asked by Anonymous - Jul 24, 2023
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Hello Hardik Sir , thanks for your reply to my query dated 21 Jul. I still have doubt in point no 1 whereby by you have suggested that i should include the income of deceased till the date of death while filing return of deceased . The point which needs clarification is that in 26AS you will see the income earned and TDS deducted till the deceased accounts are closed. But As suggested i will be showing income till the day when my father died which will be less than that shown in 26As but the TDS shown is on higher income so there will be mismatch. If you say that TDS is also to be proportionally divided than how it has to be done ? How will scrutiny officer or software will understand the bifurcation done and nit send notice?
Ans: Hello again,

I understand your concern about the mismatch between the income shown in Form 26AS and the income till the date of your father's demise. Here's how you can handle this situation:

1. While filing the return for the deceased, you should indeed include the income earned till the date of death. This is as per the Income Tax Act of 1961.

2. Regarding the TDS, it is deducted based on the estimated income for the entire year. However, since your father passed away during the year, the income earned till the date of his death is less than the estimated annual income.

3. In such a case, you can claim a refund of the excess TDS deducted while filing the income tax return. The Income Tax Department will process this refund.

4. If there is a scrutiny by the Income Tax Department, you can provide the necessary documents and explain the situation. The department is aware of such circumstances and they will understand the bifurcation.

5. It's always a good idea to consult with a tax advisor or chartered accountant to ensure that the tax return is filed correctly.

I hope this clarifies your doubt.
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Hardik

Hardik Parikh  |106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 26, 2023

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