When a parent passes away, here's how their tax filing and refunds work

From filing the last return to claiming pending TDS, here's how families can manage a parent's tax matters after their passing.

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Dealing with tax paperwork after losing a loved one can feel daunting. Yet, the Income Tax Act lays down clear rules on who must file the final return and how refunds or pending tax deducted at source (TDS) can be claimed. Experts explain what families need to know.

 

Who files the final return?

Under Section 159 of the Income-Tax Act, 1961, the duty to file the return of a deceased taxpayer falls on the legal heir or executor of the estate.

 

“A legal heir is treated as an assessee for tax purposes. They must file the ITR for income earned up to the date of death,” said Shefali Mundra, chartered accountant & tax expert at ClearTax.

 

If a will exists, the executor handles the process, especially for income accrued after death.

 

Sudhir Kaushik, co-founder & chief executive officer of Taxspanner (a Zaggle company), stressed that a nominee alone cannot file

 

the return unless they are also a legal heir.

 

Kinjal Bhuta, chartered accountant and advocate, Bombay Chartered Accountants’ Society, added that in the year of death, two returns may need to be filed, one for the deceased till the date of passing and another by the legal representative for the remainder of the financial year.

 

Steps to claim refunds and TDS

If excess tax was deducted, the legal heir must first register as a representative assessee on the income tax e-filing portal.

 

According to Mundra, this involves uploading the deceased’s PAN, death certificate, and legal heir proof, along with the heir’s own bank details. Once approved, the heir can file the ITR and claim any refund.

 

Sameer Mathur, managing director and founder of Roinet Solution, noted that heirs must also ensure their bank account is pre-validated on the portal. Otherwise refunds can get stuck. If the refund initially goes to a closed account, heirs can raise a “Refund Re-issue” request online.

 

Challenges families face

Experts highlighted frequent hurdles:

 

Delays in obtaining legal heir or succession certificates, often stretching weeks or months.

 

Bank account mismatches, especially when the deceased’s account is closed.

 

Portal rejections if improper documents, such as a notarised affidavit, are submitted.

 

Disputes among multiple heirs, leading to stalemates.

 

“These hurdles often add to the emotional stress of families already coping with a loss,” said Bhuta.

 

 

Real-world examples

 

Kaushik recalled a Delhi family that lost their father in 2023. It took six weeks to get the heir certificate, and three months for the refund to finally reach the son’s account.

 

Mathur shared a case where a refund of Rs 45,000 was delayed nearly six months due to rejected documents and an unvalidated bank account.

 

Bhuta pointed to another case where a retired employee’s refund was stuck for over half a year because the portal initially tried to credit it into the deceased’s frozen account.

 

The takeaway

Filing the final ITR of a deceased parent requires legal heir proof, portal registration and careful documentation.

 

As Mundra summed it up, “The process is clearly defined, but delays in paperwork and bank mismatches often make professional guidance invaluable.”