بسم الله الرحمن الرحيم
The food which is fed with the intention of isal-e-sawab should be fed to the poor and needy ones (whether they are relative or madrasa students). It should not be fed to the rich and sahib-e-nisab people. Thus that person should act accordingly. It should be noted that it is not lawful to arrange feast after the death of someone with fixed day, date (for example, third, fourth or fortieth day), rather it is bida’h. If one wants to feed then one should feed poor and needy ones any day without fixing day and date or give food to the poor. Rather it is better that they are given money instead of food.
وفى البزازية: ويكره اتخاذ الطعام في اليوم الأول والثالث وبعد الأسبوع الخ (در مختار مع الشامى 3/148، ط: زكريا)”
Also see Fatawa Darul Uloom Deoband (18/479 and afterwards).
Allah knows Best!
Darul Uloom Deoband
This answer was collected from the official ifta website of Darul Uloom Deoband in India.