Jignesh (Service) (66 Points)
12 January 2009I stay with my wife wherein the property is owned by her (100%). House is in name of wife. There is no bank loan on any of us.
Every month I transfer a fixed amount to her bank account as Rent, and for this a receipt is issued by her.
I get a HRA as part of salary, can I claim tax benefits against the same. Please advice.
sudarshan
(CA)
(745 Points)
Replied 12 January 2009
If you have purchased house in her name, or tranferred the house without consideration, then income from rent wil be clubbed in your hand.
Jignesh
(Service)
(66 Points)
Replied 12 January 2009
Hi Sudarshan,
Please note initially the flat was on joint name where I was the first person, but then later I transfered my rights to her. Now my wife is the only owner. 100%.
In this case,please advice:
a) She has salary income + she now has rental income (from me). Can she club both and file income tax return.
b) Can i claim tax benefits against receiving HR wherein rent is paid.
please advice
PRANAV MISHRA
(CA Final student)
(573 Points)
Replied 12 January 2009
Hi Jignesh
In my opinion if u transfered the rights for adequate consideration then rental income+salary income will be taxed in ur spouse hand and then u can claim HRA exemption too if u don't own any other house property.Otherwise clubbing provisions will be attracted
Ameet
(L)
(1678 Points)
Replied 12 January 2009
I agree with Pranav with the one modification that HRA u can not claim exempt. To claim HRA exemption, u or u'r spouse or child should not own any house at the place of employment. Otherwise any one can claim HRA emption which will defeat the purpose of the legislature.
Jignesh
(Service)
(66 Points)
Replied 12 January 2009
Pranav / Ameet -
Thank you for your response. The more i am enlightened by your response, the more confusing it is getting (sorry - im not a tax savy guy). All i need to know is the following (as mentioned earlier).
a) With wife owning 100% flat, and me paying rent to her can "i" claim HRA tax benefit.
b) My wife will file her tax return separately showing her rental income + salary income. Is it fine.
Appreciate your response
PRANAV MISHRA
(CA Final student)
(573 Points)
Replied 12 January 2009
Conditions under which an assessee cannot claim HRA exemption
1the residential accomodation occupied by the assessee is owned by him
OR
2the assessee has not actually incured any expenditureon payment of rent in respect of the accomodation occupied by him
As in the case of Mr. Jignesh he satisfies neither conditions so he can claim HRA exemption.
In my opinion nowhere in the Income Tax Act a person is debared from claiming HRA Exemption just because he resides with his spouse
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