A nominee is obligated handy over the property to the authorized inheritor

My father handed away on the age of 79 in February. In his will, he has talked about 50:50 share to each the sons. My mom handed away seven years in the past. These are the queries…

1. In just a few financial institution accounts, I’m the nominee; in others, my brother is the nominee. How ought to we divide the cash in order that no tax obligation arises?

2. He had fairness investments, which have been transferred on a 50:50 foundation to our accounts. When can we promote them to keep away from tax obligations?

3. He had MF investments during which I’m the one nominee. So, do I must get them transferred to my account and promote them to present my brother a share as right here additionally we’re alleged to share 50:50? How ought to this be executed to keep away from tax obligations?

4. He couldn’t file his I-T return for AY2021. Do we have to file it mandatorily? If so, what are the obligations and the way can we inform the I-T division about his demise?

—Anil Jhamb

The nominee is a mere custodian who’s obligated handy over the asset/cash to the precise authorized inheritor. Therefore, the cash from such financial institution accounts must be distributed in accordance with the desire, regardless of who the nominee is. However, if the accounts weren’t particularly handled beneath the desire, they might be topic to intestacy, which might indicate that you simply and your brother will every obtain an equal share.

There isn’t any inheritance tax in India. Money obtained in extra of ₹50,000 as a right could be topic to tax within the palms of the recipient at relevant charges.

However, such provisions aren’t relevant the place cash is obtained pursuant to a will. Thus, there shouldn’t be any tax in your or your brother’s hand.

The sale of fairness shares might give rise to capital positive factors tax. It could also be levied at charges starting from 10% to twenty% (plus relevant surcharge and cess) the place shares have been held for greater than 24 months (12 months in case of listed shares). Otherwise, such positive factors could be topic to tax on the charge of 30% (plus relevant surcharge and cess) (15% in case of on-market sale of listed shares). For the aim of computing capital positive factors, the price of acquisition within the palms of your father could be deemed to be the price of acquisition in your palms and the interval of holding of the shares could be decided from the date when such shares had been acquired by your father.

The inheritor and the nominee needs to be the identical as a matter of cautious planning. The similar rules set out in our response to the financial institution accounts would apply to the MF models. Since the MF models could be obtained in keeping with your father’s will, there shouldn’t be any tax implications. If they’re subsequently offered and money is transferred, there could also be capital positive factors tax implications.

You and your brother can file the tax return on behalf of your father. However, the final date for submitting the tax return has already lapsed and it might be advisable that you simply contact your tax adviser or a chartered accountant on this regard.

Rishabh Shroff is associate, Cyril Amarchand Mangaldas.

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