ITR filing: Can HRA exemption be claimed on rent paid to spouse?

 







The income tax return (ITR) forms for AY 2022-23 have been notified by the income tax department. Now, taxpayers are finding ways to save tax through their investments and expenses, which can be claimed for exemption after the due date for TDS return filing on May 31, 2022.


A major section in the ITR is House Rent Allowance (HRA). Section 10 of the income tax act says that a taxpayer can claim exemption if they are paying rent for an accommodation which is not owned by them.


Hence, this makes a taxpayer eligible for claim if they are living in a house owned by their wife or husband, provided he or she is getting HRA in its monthly income. This may sound easy, but there’s a catch. While this income tax exemption rule fits well in the case of rent paid to parents, brother or sister, it is not that simple in the case of spouse.


If a taxpayer claims HRA exemption on the rent paid to their spouse, the spouse should have bought the house from its own income and not be bought by the taxpayer himself in the name of its spouse, as per the tax and investment experts.
Paying rent to parents

Individuals who live with their parents can also claim a deduction for HRA by paying rent. For this, you are required to pay the rent via cheque or transfer the money (rent) to their bank account. However, you need to make sure your parents own this property. You can’t be a co-owner or owner of this property as you can’t claim tax exemption on rent paid to yourself. Besides, you must enter into an agreement for rent with your parents and get receipts for rent paid every month.


HRA claimed is taxable for parents




It is important to note here that the taxpayer’s parents are required to pay the tax on the rent money paid by them. It will come under the income from the house property head in their income tax return.


However, they can deduct property taxes and also claim a standard deduction of 30 per cent on the rental income.


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