My father expired in April, 2020. He has made me nominee in a TDR worth Rs 8 Lakhs. Will there be tax implication in the same?
I am in a PSU and regularly filing my returns. Can you suggest how to reduce or avoid tax implication, if there is any?
Ans: If a person dies, the legal representative has to file tax returns on behalf of the deceased to report the income earned by the deceased until the date of his death, and taxes deducted thereon.
Legal heir has to register himself at the income tax website for filing the return on behalf of decease.
Any income earned after the date of death from the assets inherited from the deceased is taxable in the hands of the legal heir. Legal heir should include this income inherited from the deceased in his own income while filing own income tax return.
One cannot avoid the additional income being added to your regular income, but one can look to make maximum use of various deductions that are available tax saving investments under Section 80C, medical insurance under Section 80D for self and parents, NPS under Section 80CCD, donations under Section 80G, etc.