What to do if application for registration as Legal Heir is rejected in Income Tax?

When someone passes away, their legal heirs have to apply for registration as legal heirs with the Income Tax Department to inherit their assets and file their tax returns. However, sometimes the application for registration as legal heir may be rejected due to various reasons, including incorrect or insufficient documentation. In such a scenario, it is important to know what steps one can take to rectify the situation. In this Article we will have a look on, what to do if application for registration as Legal Heir is rejected in Income Tax? And also, we will go through Legal Heir Registration Process in detail.

Quick Look

In the eyes of the law, a legal heir is a person who represents the assets of a deceased person. The legal heir is responsible for managing the assets of the deceased and ensuring that any taxes owed by the deceased are paid. 

The legal heir can register on the income tax website as a legal representative and take advantage of services like uploading returns, submitting ITR online, responding to defective return notices, submitting forms online, rectification requests and status, refund reissue requests, and responding to outstanding demands. Any income earned after the date of death from the assets inherited from the deceased is taxable in the hands of the legal heir. 

The legal heir is responsible for the tax payable, as well as any penalties, fines, or interest that the deceased would have been liable for had they not died. The legal heir should include this income inherited from the deceased in their own income while filing their own income tax return.

Who is a Legal Heir?

A legal heir is a person who succeeds the deceased person’s property and assets as per the law. The legal heirship can be established through inheritance or by will. The legal heir can be a spouse, children, parents, siblings, or any other blood relative of the deceased person. The legal heirship is determined as per the provisions of the Hindu Succession Act, 1956, and the Indian Succession Act, 1925.

The legal heirs of a person can vary depending on the laws of the country, as well as the specific circumstances of the case. Generally, the following people may be considered legal heirs:

• Spouse – The spouse of the deceased is a legal heir and may be entitled to a portion of the property.
• Children – The deceased’s children are frequently regarded as legal heirs and may be entitled to a share of the estate. This can apply to kids who are biological, adopted, or born outside of marriage.
• Parents – In some circumstances, especially when there are no children or a spouse, the parents of the deceased may be regarded as the legal heirs.
• Siblings – If a person passes away without a surviving spouse, children, or parents, their siblings may be regarded as their legal heirs.
• Other Family Members – Other family members, including grandparents, aunts, uncles, cousins, and even more distant relatives, may occasionally be deemed legal heirs.

Documents required for registration as a Legal Heir 

The following documents are required:

• PAN card of the deceased.
• PAN Card of the Legal Heir.
• Death certificate.
• Legal Heir proof.
• Registered Will.
• Letter from the bank providing information on the nominee or joint account holder at the time of death.
• Order passed in the name of the deceased (if applicable).
• Family pension certificate issued by state central government.
• The legal heir certificate issued by the court of law or the local revenue authorities is accepted as a legal heir certificate.

Legal Heir Registration Process in Income Tax Department

In India, it is necessary to register as a legal heir with the Income Tax Department if you want to receive the income tax refund or the income tax dues of a deceased person. The legal heir registration process is straightforward and can be done online.

• Step 1: Obtain the Legal Heir Certificate: The first step in the legal heir registration process is to obtain a legal heir certificate. This certificate is issued by the revenue department of the state government where the deceased person resided. The legal heir certificate is proof of your relationship with the deceased person and your entitlement to inherit the property.

• Step 2: Register as a Legal Heir with the Income Tax Department: Once you have obtained the legal heir certificate, you can register as a legal heir with the Income Tax Department. The registration can be done online by visiting the official website of the Income Tax Department.

• Step 3: Submit the Required Documents: Along with the legal heir certificate, you will need to submit certain documents to complete the registration process. These documents are mentioned above for your reference.
• Step 4: Verification and Approval: Once you have submitted all the required documents, the Income Tax Department will verify the information provided. If everything is in order, your registration as a legal heir will be approved, and you will be able to receive the income tax refund or the income tax dues of the deceased person.

Register as Legal Heir Representative in Income Tax Department

To file an application for registration as a legal heir in the Income Tax Department, the legal heir must follow the steps provided on the e-filing portal:

• Login to Legal Heir Income Tax e-filing account by entering username (PAN) and Password.
• Go to the “Authorised Partners” section, and then click on “Register as Representative”.
• Select “New Request” as the request type and “Legal Heir” as the category to register.
• Fill the required details and upload all the documents mentioned above.
• The legal heir should mandatorily provide the “Reason for Registration” as a representative assessee.
• Verify and submit the request.
• After document verification, mail regarding the acceptance or denial of the request will be received.

Once the request for registration is approved, the legal heir can file a return as a legal heir on behalf of the deceased. The ITR can be filled in the e-filing portal, and the PAN of both the deceased person and legal heir should be registered in the e-filing portal. If the deceased person’s PAN is not registered, then the legal heir can register on behalf of the deceased.

What to do if the Application for the Registration as Legal heir is rejected in Income Tax?

When someone dies, their legal heirs must register as legal heirs with the Income Tax Department in order to inherit their assets and file their tax returns. However, the application for legal heir registration may be refused for a variety of reasons, including faulty or inadequate evidence. In such a case, it is critical to understand what activities might be taken to correct the issue.

If your application for registration as a legal heir is denied by the Income Tax Department, you may follow these steps:

• Understand the Reason for Rejection: The first step to take when your application for registration as legal heir is rejected is to understand the reason for rejection. The reason could be an incomplete application form, insufficient documentation, or incorrect information provided in the application form. Once you understand the reason for rejection, you can rectify the issue and resubmit the application.

• Rectify the Errors and Resubmit the Application: If the reason for rejection is due to incorrect or incomplete documentation or information provided in the application form, rectify the errors and resubmit the application. Make sure to include all the necessary documents and provide accurate information in the application form.

• File an Appeal: If your application is rejected due to reasons beyond your control, such as a dispute over the ownership of the assets, you can file an appeal with the income tax department. The appeal should include all relevant documents and evidence to support your claim.

• Seek Legal Advice: If you are unsure about how to proceed or if you face legal challenges in registering as a legal heir, seek legal advice. A legal expert can guide you through the process and help you understand the legal implications of the rejection.
• Follow up on the Application: After resubmitting the application or filing an appeal, follow up with the income tax department to ensure that your application is processed in a timely manner. If there is a delay, follow up with the department to know the reason for the delay and the expected timeline for processing the application.

Important considerations to be kept in mind for Legal Heir Registration

The following are the important consideration to be kept in mind by the applicant for Legal Heir Registration:

• Only the assessee serving as the legal heir representative may file a return for a deceased person. For this, the Legal Heir must submit an application to the Income Tax Portal to become a Representative Assessee. The steps are mentioned above about how to register as a Legal Heir Representative. The application may be accepted or refused after the submission of supporting materials. 
• If the application for registration as a legal heir is rejected by the income tax department, the legal heir will receive a message regarding the rejection or acceptance of the application. 
• The legal heir should then log in to the e-filing portal to first comprehend the reasons for the decision before submitting a new application.
• To know the reason for rejection of application follow below mentioned steps:
• Log in to the e-filing portal.
• The legal heir should go to the “Authorised Partners” tab and click on “Register as Representative Assessee.
• Click on Inactive request.
• Point your cursor to the “i” button next to the officer’s request rejection.
• After understanding the reasons for denial, you must reapply with the adequate details and supporting documentation.

Once the request for registration is approved, the legal heir can avail of services on behalf of the deceased, such as uploading returns, submitting Income Tax Return online, responding to defective return notices, submitting forms online, rectification requests and status, refund reissue requests, and responding to outstanding demands.

Conclusion

In conclusion, the rejection of an application for registration as a legal heir can be a frustrating and challenging situation. However, by understanding the reasons for rejection and taking the necessary steps to rectify the mistake, you can resolve the situation. Seeking the help of a legal expert can also be beneficial. By following the steps mentioned above, you can ensure that your application for registration as a legal heir is accepted by the Income Tax Department.