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Allowbility of exemption sec10 (13A)

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MARTAND SARNAIK

11 Points Posted on 07 October 2022

I am a a salryholder. our house is in d name my wife whose income is below taxable limit . We are residing therein together. I intend to pay her rent by cheque and claim HRA Exemption under sec 10(13A). Am I eligible to claim? Pl give applicable case laws if any of Bombay HC , SC etc

Replies (5)

Quick Summary

This discussion explores whether a salaried individual can claim HRA exemption under Section 10(13A) by paying rent to their spouse, whose name the house is registered under. While not explicitly barred by law, the consensus suggests this practice may lead to income clubbing and attract departmental scrutiny, ultimately offering no tax benefit and potentially contravening principles of natural justice.

Eswar Reddy S

CFO- at NHTF

58280 Points Posted on 08 October 2022

These are the areas which are under the lense of IT Dept..Donot do this kind of tricks for tax avoidance since it is against natural justice

rama krishnan

12244 Points Posted on 08 October 2022

It's not expressly barred by law to pay rent to spouse and to claim hra deductions on the rent paid by you. as per query, your spouse's income is below the maximum amount chargeable to tax. in that case it's obvious that the house property was purchased out of your income but registered in the name of your spouse. In such a situation, the income generated out of such house property will be clubbed in your hands. ultimately the tax impact is nil and hence there's no use and there's no tax benefits arises to you. so better try to stay away from such type of practice which would ultimately invite the attention of the department