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.


Download our App to get knowledge updates: https://play.google.com


Join Our Telegram Channel for more updates:https://t.me/praveengst:













Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the opti
Read more

Income Tax Return or ITR for FY20 Can Be Filed Till May 31

Image
  n the wake of severe Covid-19 pandemic, the Central Board of Direct Taxes (CBDT) has decided to extend timelines of various tax compliance dates on Saturday. “In view of the adverse circumstances arising due to the severe Covid-19 pandemic and also in view of the several requests received from taxpayers, tax consultants & other stakeholders from across the country, requesting that various compliance dates may be relaxed, the Government has extended certain timelines today," the ministry of finance said in a statement. The move is aimed at mitigating “the difficulties being faced by various stakeholders," it further added. The “relaxations are the latest among the recent initiatives taken by the government to ease compliances to be made by the taxpayers with the aim to grant respite during these difficult times," it mentioned in a notification. “It’s a welcome move to extend the timeline of various tax compliances as the country is struggling with severe second wave
Read more