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HRA Deduction - Rent paid to Wife

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NAVEEN RASTOGI

MANAGER

21 Points Posted on 09 December 2009

Hello All

If a newly purchased property gets registered in name of wife, then can her husband claim the decuction of HRA while paying rent to her.

The wife would file ITR with income head House Property and would claim benefit of Interest on Housing Loan under Let out property.

The EMI of the loan would be served through a joint account in which Husband would pay the monthly rent and wife would also contribute some amount as the wife is also earning.

Alternatvely, the loan could be served from Husband bank account and the amount over and above the monthly rent would be repaid by wife to husband on a monthly basis.

by doing this , husband would be able to claim HRA deduction from his salary and wife would claim Interest.

My question is , is this possible and if yes, then does the method suggested by me is fine or does it needs any finetuning

Thanks

Naveen

Replies (1)

Sunil

Trader

2253 Points Posted on 09 December 2009

I have never received HRA. Assuming that your wife is the beneficial owner of the property and she has cquired it for adequate consideration using her own funds and the borrowing is also in her name, she can rent it out to your company who lets you stay in the rented accomodation and allow you HRA. However usually I have come across such instances where father / mother own the property and son gets the HRA.

As a businessman, I am not allowed deduction on house rent paid in place of business because my wife is owning a house property within 50 km from the limits. I do not know whether the same condition is applicable for HRA. Maybe someone would throw light on this.