Do successor of a bank account have to pay tax

Rauf Jalal (Querist) 18 March 2012 This query is : Resolved
If a person is a joint account holder of a bank account and the other person holding the account is his father does he have to pay tax on the account.
I was a joint account holder in my fathers account but i never used the account or signed a cheque. Now after my fathers death I started to use the account and sign cheques.
To my surprise the income tax department has send me a notice to bring details to their office of the account but for the period i was not using the account and pay tax .
What should i do. Rest they are asking me the details of the money received and spend. I have know knowledge of that as my father was using the account.
Please guide me for this problem.

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Raj Kumar Makkad (Expert) 18 March 2012
You can plead the same argument before the income tax authorities. The liability of income tax is personal and it cannot be clubbed merely because the bank account of two persons is same.

You should put the entire details of the bank account accurately before the IT authorities so that appropriate decision may be taken thereon.

A V Vishal (Expert) 19 March 2012
The LR is responsible for any unpaid taxes or the department has right to attach the account. I presume ur served with a notice probaby because it is a sb a/c and more than 10 lakhs must be deposited in cash. Since you have provided inadaequate details further advise in the matter is not possible.

Nadeem Qureshi (Expert) 19 March 2012
I agree with experts

C. P. CHUGH (Expert) 20 March 2012
Normally a bank account is treated to be maintained by First Name holder of the account and joint holder is not responsible for the conduct of account, unless he is also a signatory to the account. First of all get a certificate from bank that the operation of account upto the death of first account holder was maintained and operated upon by such deceased. I presume you had informed bankers about of the death of first account holder before operating the account, if not, how bank allowed operation of account under your signatures. It could only be possible that you were signatory to the account ab-initio.

In such case you can run away from the liability or consequences of incometax proceedings.

However if you are able to substantiate that you were neither signatory nor beneficiary of the account till the death of your father, your liability towards income tax would be restricted to the amount of money you succeeded in that account as on the death of your father.

C. P. CHUGH (Expert) 20 March 2012
Please read "in such case you cannot run away from the liability or consequences of income tax proceedings" for second last para of reply.

Guest (Expert) 20 March 2012
Dear Rauf,

Even if the account contained the income of your father and you were only a nominal co-operator of account during his life time, the tax liability, if any, of your father has to be met out of the income/balance of the account. Your succession to the account would be limited to the unincumbered balance of the account after meeting with the tax liability.

If no tax becomes due against your father, you will have to proved that before the IT authorities.

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