Question And Answer
Subject: Whether legal heirs are liable to pay Capital gains tax in respect of property which was sold before his death ?
Querist: Sree lekha
Answered by:
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Date: July 19, 2021
Query asked by Sree lekha


There is a sale of immovable property during the financial year 2020-21 in the month of August. However, the assessee has died at the end of the year in the month of March 2021. Is there a liability to pay capital gain tax on this sale by the legal heirs?

Please clarify

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Answer given by

We presume that the property was sold in the month of August 2020 year ending 31 -3 -2021 and the assessee died in the month of March 2021 . Sections 159 160 and 161 of the Income -tax Act 1961 deals with provisions relating to assessment of Legal Representative. The legal heirs has to file the return of the deceased showing the capital gain ,if any payable for the financial year 2020 -21 , under the PAN of the deceased assessee. The name of the legal representative must be specified . Sahasragshu Kanta v. Collector of Malda ( 1963 ) 47 ITR 754 ( Cal ) ( HC) . In case the income is received after the death from the estate of the deceased the “legal representative / heirs” as per section 161 of the Income Tax Act, 1961 has to apply for new PAN as “Estate of the deceased person” and file return of income with new PAN till the disposal / dissolution of the income / property / assets of the deceased.

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One comment on “Whether legal heirs are liable to pay Capital gains tax in respect of property which was sold before his death ?

    Further If the legal heir acquires a residential house u/s 54, will the deduction be allowed?

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