Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live. Part E of Chapter XV (Executors).
Subject: The income of the estate of a deceased person is chargeable to tax in the hands of the executor; the executor is assessed as an individual (sole executor) or as an association of persons (more than one executor); the estate income is assessed separately from the executor's own income; and the executor is assessed from the date of death until the estate is completely distributed.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
Section 159 carries the deceased's own liability into the hands of the legal representative, but it stops at the year of death: the Supreme Court in Amarchand Shroff and James Anderson held that the legal-representative fiction cannot reach income arising to the estate after the year of death. That left a gap — who is taxable on the income that the estate continues to earn during the (often lengthy) period of administration before it is distributed to the beneficiaries? Section 168 fills it. It charges the income of the estate of a deceased person to tax in the hands of the executor, as a distinct assessable persona, from the date of death until the estate is completely distributed.
2. The executor as a separate assessable entity
Under section 168 the executor is assessed on the estate income as an 'individual' where there is a single executor, or as an 'association of persons' where there is more than one, and — importantly — the estate income is assessed separately from, and in addition to, the executor's own personal income (sub-section (2)). The executor under section 168 is thus a fresh taxable entity, not merely a person discharging the deceased's pre-existing liability (which is the office of the legal representative under section 159).
3. Duration: until 'complete distribution'
The executor's section 168 assessment runs until the estate is completely distributed to the beneficiaries according to their several interests (sub-section (3)). The test is actual completion of administration, not a theoretical capacity to distribute: so long as administration is incomplete — for example because estate-duty or other liabilities remain outstanding, or assets remain to be got in — the executor continues to be assessable (Navnit Lal Sakarlal; Mrs. Usha D. Shah). As and when parts of the estate are distributed and income from the distributed portion vests in the beneficiaries, that income is assessed in the beneficiaries' hands and not the executor's (sub-section (4)).
4. The year of death: two assessments
For the previous year in which death occurs there are, in effect, two assessments: income up to the date of death in the hands of the legal representative under section 159, and income from the date of death to the end of the year (and thereafter year on year until distribution) in the hands of the executor under section 168 (B.D. Gupta & Sons). Keeping the two provisions distinct — section 159 for the deceased's own liability up to death, section 168 for post-death estate income — is the key to applying Chapter XV correctly on a death.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
168. (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor,—
(a) if there is only one executor, then, as if the executor were an individual; or
(b) if there are more executors than one, then, as if the executors were an association of persons; and for the purposes of this Act, the executor shall be deemed to be resident or non-resident according as the deceased person was a resident or non-resident during the previous year in which his death took place.
(2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income.
(3) Separate assessments shall be made under this section on the total income of each completed previous year or part thereof as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the estate according to their several interests.
(4) In computing the total income of any previous year under this section, any income of the estate of that previous year distributed to, or applied to the benefit of, any specific legatee of the estate during that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous year of such specific legatee.
Explanation.—In this section, "executor" includes an administrator or other person administering the estate of a deceased person. Right of executor to recover tax paid.
C. AUTHORITIES
Section 168 is the richest of the executor/estate provisions. The temporal-scope authorities and the historic rationale authorities are grouped below; all citations are web-verified. The unverifiable leads ("Administrator-General of West Bengal", "Mahamaya Dassi") have been omitted.
Cluster A — Duration of the executor's assessment: 'complete distribution'
Navnit Lal Sakarlal v. CIT
Citation: (1992) 193 ITR 16 (SC)
Facts: Whether estate income for the relevant years was assessable in the executor's hands or had passed to the residuary legatees; estate-duty liability remained outstanding and no actual distribution had occurred.
Held: Under section 168(3) the executor continues to be assessed until the estate is completely distributed to the beneficiaries according to their several interests; the test is actual completion of administration, not a theoretical capacity to distribute — outstanding estate-duty liability and unresolved management keep administration incomplete and the executor assessable.
Relevance: The leading Supreme Court authority fixing the temporal scope of section 168.
CIT v. Mrs. Usha D. Shah
Citation: (1981) 127 ITR 850 (Bom)
Facts: The point at which the executor's section 168 liability ends and estate income becomes that of the beneficiaries.
Held: Section 168(3) mandates assessment in the executor's hands from the date of death until complete distribution to the beneficiaries according to their several interests; partial steps do not end the executor's liability.
Relevance: Frequently-cited High-Court authority on the 'complete distribution / completion of administration' line; foreshadows Navnit Lal.
Facts: Executors of a deceased; income/capital gains received in a year after the previous year in which the deceased died; the Revenue invoked the 1922-Act section 24B fiction.
Held: The section 24B fiction extended the deceased's legal personality only for the previous year in which he died; income received in a subsequent year was not assessable under section 24B.
Relevance: The historic authority exposing the machinery gap that section 168 was enacted to cure by charging post-death estate income in the executor's hands until distribution.
CIT, Bombay v. Amarchand N. Shroff (by his heirs and LRs)
Citation: (1963) 48 ITR 59 (SC)
Facts: A deceased solicitor's professional receipts came in to his heirs in later assessment years; the Revenue tried to extend the section 24B(1) fiction.
Held: The section 24B fiction makes the legal representative an assessee only for income the deceased would have earned in the year of death; it cannot be stretched to income received in years subsequent to the account year of death.
Relevance: Companion authority to James Anderson; marks the section 159/168 dividing line — income up to/in the year of death to the legal representative (section 159), post-death estate income to the executor (section 168).
Cluster C — The two assessments for the year of death
B.D. Gupta & Sons v. ITO
Citation: (2015) 60 taxmann.com 38 (Del)
Facts: Treatment of estate income spanning the date of death within the same previous year.
Held: For the previous year in which death occurs there are two assessments — income up to the date of death in the hands of the legal representative under section 159, and income from the date of death onwards (and year on year until distribution) in the hands of the executor under section 168.
Relevance: Crisply states the operating mechanics of the section 159/168 interface for the year of death. (Verify the precise forum/report before quoting.)
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XV — LIABILITY IN SPECIAL CASES
Section 168 — Executors
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live. Part E of Chapter XV (Executors).
Subject: The income of the estate of a deceased person is chargeable to tax in the hands of the executor; the executor is assessed as an individual (sole executor) or as an association of persons (more than one executor); the estate income is assessed separately from the executor's own income; and the executor is assessed from the date of death until the estate is completely distributed.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. Why section 168 exists: the gap section 159 could not fill
Section 159 carries the deceased's own liability into the hands of the legal representative, but it stops at the year of death: the Supreme Court in Amarchand Shroff and James Anderson held that the legal-representative fiction cannot reach income arising to the estate after the year of death. That left a gap — who is taxable on the income that the estate continues to earn during the (often lengthy) period of administration before it is distributed to the beneficiaries? Section 168 fills it. It charges the income of the estate of a deceased person to tax in the hands of the executor, as a distinct assessable persona, from the date of death until the estate is completely distributed.
2. The executor as a separate assessable entity
Under section 168 the executor is assessed on the estate income as an 'individual' where there is a single executor, or as an 'association of persons' where there is more than one, and — importantly — the estate income is assessed separately from, and in addition to, the executor's own personal income (sub-section (2)). The executor under section 168 is thus a fresh taxable entity, not merely a person discharging the deceased's pre-existing liability (which is the office of the legal representative under section 159).
3. Duration: until 'complete distribution'
The executor's section 168 assessment runs until the estate is completely distributed to the beneficiaries according to their several interests (sub-section (3)). The test is actual completion of administration, not a theoretical capacity to distribute: so long as administration is incomplete — for example because estate-duty or other liabilities remain outstanding, or assets remain to be got in — the executor continues to be assessable (Navnit Lal Sakarlal; Mrs. Usha D. Shah). As and when parts of the estate are distributed and income from the distributed portion vests in the beneficiaries, that income is assessed in the beneficiaries' hands and not the executor's (sub-section (4)).
4. The year of death: two assessments
For the previous year in which death occurs there are, in effect, two assessments: income up to the date of death in the hands of the legal representative under section 159, and income from the date of death to the end of the year (and thereafter year on year until distribution) in the hands of the executor under section 168 (B.D. Gupta & Sons). Keeping the two provisions distinct — section 159 for the deceased's own liability up to death, section 168 for post-death estate income — is the key to applying Chapter XV correctly on a death.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
168. (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor,—
(a) if there is only one executor, then, as if the executor were an individual; or
(b) if there are more executors than one, then, as if the executors were an association of persons; and for the purposes of this Act, the executor shall be deemed to be resident or non-resident according as the deceased person was a resident or non-resident during the previous year in which his death took place.
(2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income.
(3) Separate assessments shall be made under this section on the total income of each completed previous year or part thereof as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the estate according to their several interests.
(4) In computing the total income of any previous year under this section, any income of the estate of that previous year distributed to, or applied to the benefit of, any specific legatee of the estate during that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous year of such specific legatee.
Explanation.—In this section, "executor" includes an administrator or other person administering the estate of a deceased person. Right of executor to recover tax paid.
C. AUTHORITIES
Section 168 is the richest of the executor/estate provisions. The temporal-scope authorities and the historic rationale authorities are grouped below; all citations are web-verified. The unverifiable leads ("Administrator-General of West Bengal", "Mahamaya Dassi") have been omitted.
Cluster A — Duration of the executor's assessment: 'complete distribution'
Navnit Lal Sakarlal v. CIT
Citation: (1992) 193 ITR 16 (SC)
Facts: Whether estate income for the relevant years was assessable in the executor's hands or had passed to the residuary legatees; estate-duty liability remained outstanding and no actual distribution had occurred.
Held: Under section 168(3) the executor continues to be assessed until the estate is completely distributed to the beneficiaries according to their several interests; the test is actual completion of administration, not a theoretical capacity to distribute — outstanding estate-duty liability and unresolved management keep administration incomplete and the executor assessable.
Relevance: The leading Supreme Court authority fixing the temporal scope of section 168.
CIT v. Mrs. Usha D. Shah
Citation: (1981) 127 ITR 850 (Bom)
Facts: The point at which the executor's section 168 liability ends and estate income becomes that of the beneficiaries.
Held: Section 168(3) mandates assessment in the executor's hands from the date of death until complete distribution to the beneficiaries according to their several interests; partial steps do not end the executor's liability.
Relevance: Frequently-cited High-Court authority on the 'complete distribution / completion of administration' line; foreshadows Navnit Lal.
Cluster B — Why section 168 exists: the section 159/168 boundary and the historic gap
CIT v. James Anderson
Citation: (1964) 51 ITR 345 (SC)
Facts: Executors of a deceased; income/capital gains received in a year after the previous year in which the deceased died; the Revenue invoked the 1922-Act section 24B fiction.
Held: The section 24B fiction extended the deceased's legal personality only for the previous year in which he died; income received in a subsequent year was not assessable under section 24B.
Relevance: The historic authority exposing the machinery gap that section 168 was enacted to cure by charging post-death estate income in the executor's hands until distribution.
CIT, Bombay v. Amarchand N. Shroff (by his heirs and LRs)
Citation: (1963) 48 ITR 59 (SC)
Facts: A deceased solicitor's professional receipts came in to his heirs in later assessment years; the Revenue tried to extend the section 24B(1) fiction.
Held: The section 24B fiction makes the legal representative an assessee only for income the deceased would have earned in the year of death; it cannot be stretched to income received in years subsequent to the account year of death.
Relevance: Companion authority to James Anderson; marks the section 159/168 dividing line — income up to/in the year of death to the legal representative (section 159), post-death estate income to the executor (section 168).
Cluster C — The two assessments for the year of death
B.D. Gupta & Sons v. ITO
Citation: (2015) 60 taxmann.com 38 (Del)
Facts: Treatment of estate income spanning the date of death within the same previous year.
Held: For the previous year in which death occurs there are two assessments — income up to the date of death in the hands of the legal representative under section 159, and income from the date of death onwards (and year on year until distribution) in the hands of the executor under section 168.
Relevance: Crisply states the operating mechanics of the section 159/168 interface for the year of death. (Verify the precise forum/report before quoting.)
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.