Hra exemption for salary income

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AUDITOR
551 Points Joined August 2012

Yes, you can. Since rent is paid to owners, the property must be owned by your grand parents. It may be owned by one or both of your grand parents. Remember that you cannot be an owner or co-owner of this property.You can do this by transferring rent to their bank account or pay via cheque. This way you will be able to support your HRA claim properly

Usually employers ask for a copy of rent agreement for their records. They can also request for rent receipts to allow you HRA exemption. You can enter into a simple rent agreement with your grand parents. You can prepare rent receipts also.

Just ensure that you have a proper rent agreement in place and the rent is paid via banking channels. These will help you to claim HRA. Since you want to pay rent to your grandmother, I am assuming that she is the owner of the property. If its a joint property, my suggestion is to divide the rent and pay to all the owners in the proportion in which they own the property.

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On 14 April 2021 at 20:09 Report
Replies (35)
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AUDITOR
551 Points Joined August 2012

Yes, you can. Since rent is paid to owners, the property must be owned by your grand parents. It may be owned by one or both of your grand parents. Remember that you cannot be an owner or co-owner of this property.You can do this by transferring rent to their bank account or pay via cheque. This way you will be able to support your HRA claim properly

Usually employers ask for a copy of rent agreement for their records. They can also request for rent receipts to allow you HRA exemption. You can enter into a simple rent agreement with your grand parents. You can prepare rent receipts also.

Just ensure that you have a proper rent agreement in place and the rent is paid via banking channels. These will help you to claim HRA. Since you want to pay rent to your grandmother, I am assuming that she is the owner of the property. If its a joint property, my suggestion is to divide the rent and pay to all the owners in the proportion in which they own the property.

2 Reply
On 14 April 2021 at 20:09
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16 Points Joined March 2017
Yes surely
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On 16 April 2021 at 17:35
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2 Points Joined July 2017
If you cannot convince yourself then you cannot convince others. This is absolutely colourable device in order to evade tax liability. This won't stand if AO applies McDowell's case law.
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On 16 April 2021 at 17:37
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student
40 Points Joined December 2016
Yes you can take only parents has been excluded...if the parents show it in their it it is allowed
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On 16 April 2021 at 17:37
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25 Points Joined June 2017
Yes he can provided the grandfather is showing the rental income in his income tax return filed
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On 16 April 2021 at 17:38
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article
22 Points Joined September 2014
Transfer the amount every month and have a rent agreement with your grandfather then there is no problem at all
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On 16 April 2021 at 17:39
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6 Points Joined April 2017
Yes, you can. You can pay rent to your parents/grand parents and claim HRA provided your parents/grand parents own the place you currently live in.

Enter into a rental agreement with your parents/grand parents and pay rent to them each month. 

But remember: your parents/grand parents will have to show the rent in their income tax return. 

it's better we can keep receipts of payment every month or certain period - suggest bank payments.
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On 16 April 2021 at 17:41
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2 Points Joined September 2019
HRA is a benifit given to employee for staying at places other than home towns. Paying of rent to grandfather is not eligible. However, if such grandfather is not having any income and is solely dependent on employee, then there could be a change to convince AO. (exceptional case)
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On 16 April 2021 at 17:41
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6 Points Joined April 2017
Yes, you can. You can pay rent to your parents/grand parents and claim HRA provided your parents/grand parents own the place you currently live in.

Enter into a rental agreement with your parents/grand parents and pay rent to them each month. 

But remember: your parents/grand parents will have to show the rent in their income tax return. 

it's better we can keep receipts of payment every month or certain period - suggest bank payments.
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On 16 April 2021 at 17:41
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25 Points Joined June 2017
Sourav the question is that the employee is getting hra and wants to set off against rent given to grandfather
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On 16 April 2021 at 17:42
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Proprietor
39 Points Joined December 2007

In this case HRA can be allowed if you have proper rental agreement and u are paying rent to your grand father.

The rental income need to be shown by grand father as income in his ITR

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On 16 April 2021 at 17:45
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25 Points Joined June 2017
40A is applicable to business exp and not here
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On 16 April 2021 at 17:46
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4 Points Joined March 2019
The exemption can be claimed provided there is an agreement and the rental income is shown in the grandfather's hands
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On 16 April 2021 at 17:55
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Chartered Accountant
36 Points Joined May 2017
We does not require employe employer relationship.
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On 16 April 2021 at 17:56
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accountant
24 Points Joined July 2014
Views of Mr Sourav are not correct. He is mixing up Salary income & PGBP. Further, it is to be noted that 40A(2)(b) has provisions of disallowing excess payment to specified person and not all expenses.
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On 16 April 2021 at 19:38


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