Deduction of HRA on rent paid to mother

This query is : Resolved

Vandana S. Paun (Querist)
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09 December 2007 1.A salaried Person is living in his mother house and have no residential house in his name paying a house rent to his mother does this amt. is considered as rent paid for calculation of house rent allowance . further rent income is offered to tax in his mother's return of income .

2.If yes any contract need to preapred for income tax purpose .

3.is there is any risk of disallowance by assessing officer .

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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09 December 2007 Dear Madam

As long as evidence for such tenancy arrangement (rental agreement) and evidence for monthly payments (cheques)are properly there, there is no hindrance for the assessee (who does not have a residential prop. in his name) to pay rent really to his mother and claim deduction as per section 10(13A) of the Income Tax Act 1961.

But please remember that the house property is in the name of mother genuinely (i.e. not gifted temporarily and artificially). Because section 27 brings in the concept of deemed ownership.

K V Subba Rao

K V Subba Rao (Expert)
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09 December 2007 (1) Yes. Rent paid by a salaried person to his mother qualifies for consideration as rent paid subject however to condition that mother includes the rent in her Total Income from IT purpose. To be on safe side, better deposit the rent in her SB Account every month and later withdraw as per family understanding

(2) No need for any formal contract. If ever the Employer or ITO asks for the same, the same could be produced in the form of a letter

(3) Absolutely no risk of disallowance by the assessing officer

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B L GUPTA

B L GUPTA (Expert)
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09 December 2007 YES, THE RENT PAID CAN BE CONSIDERED FOR HRA CACULATION PURPOSE. FORMAL RENT DEED MAY NOT BE NECESSARY.THE A O CANNOT CHALLENGE THE RENT PAID BECAUSE MOTHER IS INDEPENDENT OF HER SON FOR TAX PURPOSES AND MOREOVER SHE IS INCLUDING THIS INCOME IN HER TAX RETURNS,HENCE NO HESSELS FROM A O POINT OF VIEW