My father died on April 1, 2020 without a will. The surviving heirs of the family are my mother, three married sisters and myself. It will not be possible for me to obtain a deed of succession or to arrive at the distribution of the property of my deceased father by mutual agreement. among the surviving heirs in a short time. On behalf of my deceased father I have the following taxable income. (i) Rental income from home ownership for apartments and stores donated on a rental basis. Here, the related property is held by my deceased father together with my surviving mother. The investments in these properties were made by my deceased father from his taxable income, and nothing was contributed by the mother to the investment. (ii) Rental income from the banquet hall given to the public for wedding and other social functions. The banquet hall is under the unique name of my deceased father and is rented out. (iii) Profit from the activity of a retail store selling glasses, watches and clocks. This business was run by my dad as the owner on his behalf, and my dad showed the income on his tax return. How do I file a tax return in the event of my father’s death under the above income for fiscal year 2020-2021? Please also let me know if the rental income from shops and residential apartments as detailed in point no (i) above can now be declared by me in my mother’s income tax return, since she is the second holder of the properties together with my deceased father, and I collect rental checks in my mother’s name and deposit them into her bank account.
When a Hindu male dies intestate (without leaving a will), the Hindu inheritance law could be applied to divide the wealth between the class 1 legal heirs. Under the current circumstances, your mother, you and your sisters will be qualified as Class 1 heirs. Class 1 heirs will have equal rights to the property of the deceased. It is advisable to obtain legal advice on the above. As a result, the rental income from the banquet hall and the business income from the store are also taxable in your hands. Regarding the income from the property when your mother is a co-owner, in the absence of any information on the proportion of ownership, your father’s 50% share in the property will also be acquired, the five of you being the legal heirs of Class 1. You will all have to pay income tax on this part of the property. While your mother will also be taxable on her 50 percent property balance.
The writer is a partner, Deloitte India
Send your questions to [email protected]