‘My father died in September 2025’: Who should pay tax on interest earned in his bank accounts?

Today's Q&A explains such details in response to a query by a reader.

When a person dies without leaving a valid will, he is said to have died intestate and all his assets or the assets for which a valid will is not made are inherited by his legal heirs immediately on his/her death. Any income arising on such asset after the date of his death is required to be included in the hands of the respective legal heirs. So in case your father had died without leaving a valid will for these bank accounts, the interest income will have to be broken in two parts. Interest from 1 st April 2025 till date of his death will have to be included in the Income Tax Return (ITR) to be filed by you as legal representative of your father.

Interest for the period of after his death till 31st March 2026 will have to be distributed amongst all his legal heirs and included in their respect hands. From next year onwards the same will be included in the hands of the legal heirs who get to inherit the asset.

However, if the deceased had made a valid will in respect of some or all of the assets, his assets do not pass on immediately on his death and any income in respect of which a valid will is made become taxable in the hands of executors of the will as estate of the deceased till the assets are fully disposed off by the executors in accordance with the instruction contained in the will.