Tax Query: How to file return of income for deceased father
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My father died on 1st April,2020 without making will. The surviving heirs in the family are my mother, three married sisters and myself. It will not be possible for me to obtain succession certificate or arrive at distribution of wealth of my deceased father by mutual understanding. amongst surviving heirs in short time. In the name of my deceased father I have following taxable income . (i) Rental income from house property for flats and shops given on rental basis. Here the related properties are held by my deceased father jointly with my surviving mother. Investments in these properties were made by my deceased father out of his taxable income, and nothing was contributed by mother towards investment. (ii) Rental income out of banquet hall given to public for marriage and other social functions. Banquet hall is in the sole name of my deceased father and it is on rentalpagadi basis. (iii)Profit out of business of retail shop selling Spectacles, Watches and Clocks. This business was run by my father on a proprietorship basis in his name, and my father was showing income out of it in his return of income. How do I file return of income in case of my deceased father in respect of above income for the financial year 2020-21? Please also let me know whether rental income from shops and residential flats as detailed at point No. (i) above can now be reported by me in my mother’s return of income, since she is the second name holder to properties jointly with my deceased father, and I am collecting cheques for rental in my mother’s name and depositing the same in her bank account.
Vijay Ved
When a Hindu male dies intestate (without leaving a will), the Hindu Succession Act could be applied for dividing the wealth among the Class 1 legal heirs. In the current circumstance, your mother, you and your sisters will qualify as Class 1 heirs. Class 1 heirs will have equal rights on the assets of the deceased. It is advisable to get a legal view on the above.Accordingly, rental income from banquet hall and business income from shop is equally taxable in your hands. With respect to property income where your mother is a joint owner, in the absence of any information on proportion of holding, your father’s share of 50 per cent in the property will equally vest with all the five of you being class 1 legal heirs. You all will have to pay tax on income from this portion of property. While your mother will in addition will also be taxable on her balance ownership of 50 per cent.
The writer is Partner, Deloitte India
Send your queries to taxtalk@thehindu.co.in
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