Tax Updates: Even the dead pay tax.

It sounds surprising, but it’s true. When someone passes away, any income they were entitled to for that year doesn’t just vanish. That income is still taxable even if it ends up in the hands of heirs or beneficiaries.

According to Section 26(1) of the Income Tax Act, such income is deemed to be received by either the estate, the heir, or the legatee, and taxed accordingly.

Here’s the good news: expenses incurred in relation to that income can be deducted before tax is applied. And if the income is taxed in the hands of the estate, it won’t be taxed again when distributed to beneficiaries.
– Update by Lazarus Amukeshe, Hdip Tax

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