Written by Faisal Shahnawaz in Taxation FBR explains how tax liabilities, estate income and pending proceedings are handled after the death of an individual under Section 87. ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the procedure for determining the income tax liability of a deceased individual and their estate during Tax Year 2027. The FBR has issued the Income Tax Ordinance, 2001, updated up to June 30, 2026, and explained the relevant provisions under Section 87, which deals with the tax obligations and proceedings involving deceased individuals. Tax Liability of a Deceased Individual Under Section 87, the legal representative of a deceased individual is liable for any tax that the individual would have been required to pay had they not died. The legal representative is also responsible for tax payable in respect of income earned by the deceased person’s estate. However, the liability of the legal representative is limited to the extent that the deceased person’s estate is capable of meeting the tax liability. The law further provides that any tax liability under the Income Tax Ordinance, 2001, constitutes the first charge on the deceased person’s estate. This means that outstanding income tax liabilities have a priority claim against the estate before the remaining assets are distributed, subject to the applicable legal provisions. Tax Proceedings Continue After Death Section 87 also establishes how income tax proceedings are handled following the death of an individual. Any proceedings initiated against the deceased under the Income Tax Ordinance before their death are treated as proceedings against the legal representative. Such proceedings may continue against the legal representative from the stage they had…