Tax legal responsibility in case of revenue from belongings after dying with out a Will

Question: My father handed away just a few years again with out a Will, abandoning three youngsters (two married sons and one married daughter). Our mom had handed away earlier lengthy again. We haven’t been capable of distribute the belongings amongst ourselves to this point. What are the implications as we have now not filed any ITR for him after his dying? We additionally haven’t been capable of withdraw the balances within the PPF account and financial institution fastened deposits nor we have now been capable of lodge an insurance coverage declare with the insurance coverage firm. Can you please inform us how the revenue tax on father’s belongings would have an effect on us if we don’t do the distribution for say one other 10 years? Are there any revenue tax penalties for delaying the distribution?  – Ramesh Chaudhary

Answer: In case an individual dies with out leaving any legitimate Will, in respect of the belongings owned by him, he’s mentioned to have died intestate to that extent. In case of an intestate dying, the private regulation of the deceased applies as regards who Will inherit the property of the deceased and the way a lot. In case of intestate dying of a Hindu, succession to the belongings owned by the deceased is ruled by the Hindu Succession Act, 1956. In the case the place no legitimate Will is left by the deceased, all of the belongings cross on to the heirs instantly on the time of his dying with out something required to be executed by anybody.

As per the schedule of the Hindu Succession Act you all three are entitled to an equal share in all of the belongings owned by your father as your mom was not alive on the time of dying of your father. Since you all turned proprietor of the property instantly after the dying of your father, the query of maintaining the distribution of belongings pending doesn’t come up and it is best to have included the respective revenue from totally different belongings in your respective revenue tax return (ITR). You have to incorporate such revenue in your ITR as as to whether the belongings have truly been divided or not amongst the beneficiaries.

As far as ITR of your father is anxious, you had been required to file an ITR for the interval from the 1 st April of the 12 months to dying until the date of dying as authorized consultant of your father in respect of revenue until date of his dying and thereafter there may be not must file any ITR in respect of revenue from belongings owned by your father since all of the belongings had vested within the authorized heirs instantly on his dying. Since one can’t file an ITR past one 12 months, you can not file your outdated ITR now. In case the Income Tax division involves learn about it, it could situation you a discover and in that case, you will have to pay tax and curiosity on the revenue relatable to your share within the belongings of your deceased father along with a penalty between 50% to 200% of such tax legal responsibility.

Balwant Jain is a tax and funding knowledgeable and will be reached at jainbalwant@gmail.com and @jainbalwant on Twitter.

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