For a query (published on April 18, 2021) relating to sharing of income and claiming of TDS of a deceased lady by the legal heirs, it was advised that one of the legal heirs – her daughter – will be required to claim credit for proportionate share of TDS in her hands along with proportionate share of interest income. How is it possible to claim this TDS, which will not be reflected in Form 26AS? In my opinion the legal heir has to file the return of income on behalf of the deceased person claiming the TDS. Afterwards, the deposit with interest till her date of death, which will be transferred to the nominee, has to be shared by the legal heirs according to their eligible share. Please clarify.
CA. M. LakshmananMy response published to the query in the April, 18, 2021 edition was in relation to the reporting and filing of the tax return for second holder (i.e. deceased’s daughter) and her siblings and did not include comments for the tax filing of deceased. The query stated that since the name of first holder ( deceased) was removed from bank FD records and the second holder was made a primary holder, accordingly bank had deducted tax at source (TDS) in second holder’s name and PAN. Since TDS was in daughter’s name, she is required to claim credit of her share of proportionate TDS in her hands along with corresponding share of interest income (to the extent of funds belonging to her).
The balance TDS (for siblings’ share) and corresponding incomes will be required to be passed on to respective siblings. Such bifurcation of income and taxes shall be required to be appropriately reported in daughter’s income tax return form (under TDS schedule) for Financial Year in which tax has been deducted. When the other persons file their tax return, they will give similar details in their return. The system captures this information and is able give proportionate credit of TDS to people who are taxable on such proportionate incomes. Correspondingly, similar reporting under schedule TDS of the income tax return form shall be required to be done by the siblings for claiming TDS reflecting in their sister’s PAN.
In case of deceased’s tax return filings, the same would be required to be done by the legal representative as per provisions of the Income-tax Act, 1961, wherein the legal representative shall be required to register online on income-tax portal. Once the same is approved, the legal representative would be required to file the income tax return on behalf of the deceased through his/her e-filing portal. Such legal representative shall be responsible for any liabilities due for such deceased.
The writer is a practising chartered accountant
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