[FAQs] Income Tax Returns (ITR) | Clubbing of Income

  • Blog|Income Tax|ITR Week 2023-24|
  • 4 Min Read
  • By Taxmann
  • |
  • Last Updated on 5 July, 2023

A taxpayer is generally taxed in respect of his own income. However, in some cases, other person’s income clubs in taxpayer’s income. This write-up explains some of the frequently asked questions on provisions related to clubbing of income.

Clubbing of Income

Clubbing of Income

FAQ 1. My minor daughter has earned income of Rs 10,00,000 by participating in a skill-based competition. Is she required to file ITR for the concerned year?

Any income of a minor child is added to the income of parents. However, if a minor child earns any income by applying his skill, talent or specialized knowledge and experience, it is excluded from clubbing provision. The minor child is assessable on such income through his guardian. You need to apply for PAN of your daughter in Form 49A on her behalf. After obtaining PAN, you need to get yourself registered on the e-filing portal as her representative assessee and file ITR for the concerned Assessment Year. The PAN application for a minor child shall be filed and signed by a representative assessee on her behalf. In such cases, besides details of the minor, details of such representative assessee shall also be furnished under PAN application Form.

FAQ 2. I have received some income on behalf of my deceased father in my account during the year. My father failed to write his will before dying, and the partition has not yet been taken place. In whose hands, such income will be taxed?

Where a person has died intestate (without leaving behind a Will), his estate devolves immediately on his legal heirs according to the personal law that governed the deceased. In such a case, whatever income accrued or received by the deceased person from the date of death till the last day of the financial year shall be considered as income of the legal heir and disclosed in his Income-tax return.

FAQ 3. Mr X died on 23-08-2022. He had received a salary income of Rs. 12 lakhs before his death. After his death, some interest income has accrued in his account. Is ITR required to be filed for the relevant year?

Yes, filing of return is must in this case. The obligation to file ITR would be as follows:

(a) Income accruing before the death of Mr X

ITR is required to be filed in the name of the deceased (Mr X) under his PAN by his legal representative. Thus, ITR for the salary income of Rs. 12 lakhs has to be filed by the legal representative of Mr X.

(b) Income accruing after his death

Had Mr X prepared the will before his death, the executor would have been required to file ITR before distribution. After that, the legal representatives are required to file the return in their personal capacity.

As Mr X had not prepared his will before his death, his legal heirs are required to file ITR in their personal capacity. Thus, the interest income shall be added to the income of legal representatives or legal heirs, as the case may be.

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FAQ 4. Can a legal heir file the return of the deceased assessee if DSC is mandatory?

Yes, a legal heir can file a return on behalf of the deceased assessee even if DSC is mandatory. For filing such a return, the legal heir has to obtain DSC in his capacity. To file the return on behalf of the deceased, a person has to first register as a legal heir on the income-tax India e-filing website.

section 64 of the income tax act

income taxable in the hands of another person

You need to enter the name, PAN, and date of death of the deceased person. Further, upload the scanned copy of the following documents in a zip file.

  • Copy of PAN card of the deceased;
  • Copy of death certificate;
  • Copy of Legal heir proof as per the norms;
  • Copy of Letter of Indemnity (optional);

The Income-tax department will verify the request, and once the request is approved, the legal heir will be able to carry on all the e-filing related services on behalf of the deceased.

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Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

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