Vipin Arora (Assistant Manager - Finance) (61 Points)
08 August 2017
Sumit Gupta
(120 Points)
Replied 08 August 2017
RAJA P M
("Do the Right Thing...!!!")
(127977 Points)
Replied 08 August 2017
Poltu Ghosh
(Job)
(1865 Points)
Replied 08 August 2017
There is no bar on claiming HRA exemption in case of payment of rent to parents. The law does not prohibit from such claim. However do remember in order to claim the exemption the rent payment must must be real one and not merely a means to reduce the tax liability. In order to substantiate your claim of rent payment, there must be an rent agrement between you and your parents. It is not required to be registered though desired if amount involved is substantial (or then at least get it notarized). Second, you must pay the exact amount of rent to your parents every month. The rent amount must be debited in your bank in every month. Though payment through cheque is desired, but if you through cash, there must be equal amount withdrwal from bank every month to substantiate that rent has actually been paid. Get rent receipts with revenue stamp affixed where ever applicable. And most important is that your parent must offer the rental income in his or her return.
Else your rent payment may be disallowed if department can prove contrary.....
CAROUNDTHECLOCK
(CEO)
(60 Points)
Replied 09 August 2017
Yes, Please enter into a rental agreement with your mother and pay the rent in real either through check/online banking preferably. Also, do not forget to show the same as rental income in your mother's ITR.
CAclubindia
