Hra exemption for salary income

Page no : 2

M. RRACHARYULU (AUDITOR) (551 Points)
Replied 14 April 2021

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 Like

Jayesh Wadhwa (16 Points)
Replied 16 April 2021

Yes surely

Vaibhav Ruikar (2 Points)
Replied 16 April 2021

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.

ravikulateja (student) (40 Points)
Replied 16 April 2021

Yes you can take only parents has been excluded...if the parents show it in their it it is allowed

SHIVANG CHOKSHI (25 Points)
Replied 16 April 2021

Yes he can provided the grandfather is showing the rental income in his income tax return filed
1 Like


sushant (article) (22 Points)
Replied 16 April 2021

Transfer the amount every month and have a rent agreement with your grandfather then there is no problem at all

Rakesh Sasanapuri (6 Points)
Replied 16 April 2021

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.

Manohar Vennapusa (2 Points)
Replied 16 April 2021

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)

Rakesh Sasanapuri (6 Points)
Replied 16 April 2021

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.

SHIVANG CHOKSHI (25 Points)
Replied 16 April 2021

Sourav the question is that the employee is getting hra and wants to set off against rent given to grandfather


BhagyaLAkshmi,FCA (Proprietor) (39 Points)
Replied 16 April 2021

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

1 Like

SHIVANG CHOKSHI (25 Points)
Replied 16 April 2021

40A is applicable to business exp and not here

Adithya Ravi (4 Points)
Replied 16 April 2021

The exemption can be claimed provided there is an agreement and the rental income is shown in the grandfather's hands

Chokkam Hemanath (Chartered Accountant ) (36 Points)
Replied 16 April 2021

We does not require employe employer relationship.
1 Like


Darshan (accountant) (24 Points)
Replied 16 April 2021

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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