A is an employee of a pvt. firm in Delhi. he has own house in Delhi which is very small and not in sufficient to his requirement and location hence, given on rent and he is declaring the income of house in his ITR.
His wife also owns a house in Delhi where they are living. A pays monthly rent to his wife, who files ITR disclosing house property income.
Is the above arrangement legally valid.Please share your thoughts.
12 May 2016
HRA will be claim by a person who has not any self occupied house property whether small or big in near by area of your company. If you and your wife are showing HP income in your ITR which is right. but for your HRA deduction in my view you can't claim deduction as per 10 (13A).
12 May 2016
But Sec. 10(13A) or Rule 2A nowhere puts this condition that the employee should not own any house in his place of working. It says exemption is denied where an employee lives in his own house, or in a house for which he does not pay rent.
CAclubindia
