Query regarding income from salary

Yes. that is possible. provided the Employee gives rent by way of cheque to his mother & mother should file her return showing rent received as income!!! so the cheques becomes proof. then no question can be raised.

as much i know for tax deduction on salary only deduction under section 80c and loss from house property i.e. intt repayment on house loan is considered so i am not understanding that ,,,how cant you claim deduction of rent paid for deduction of tax from salary.????

If an employee receives HRA inspite of staying at own house den his HRA calculation will be Zero as actual rent paid by him is Nil. but if he shows dat he has paid rent to his mother then he cam claim HRA. His mother on the other hand will file income received from rent as the rental income will be obviously less than the slab rate she would also be exempt from tax.

my friend but in question where is it written that it is talking about HRA,

but then ownership of the house must be in the name of mother........

this case study is very interesting.......plz post the correct solution as soon as possible.....

If his salary consists of HRA, only then he can have the exemption under section10(13A) or else it is totally taxable in his hands.

However if HRA is not given he can take shelter of 80GG and can claim deduction. For this purpose

1) he shouldnot have  any SOP in the city he is working and should not reside in his relatives house (the main intention is that he is residing in a house by paying rent) and

2) he should not be in receipt of HRA or RFA.

I think the following can be done:

1)Transfer the property in the name of mother or father if it is in the name of employee.This makes her the owner of house property to attract icome from HP.

2)get a declaration from mother that employee is paying rent to his mother for his residence.

3)pay through cheque (i dont know whether it is mandatory) but it acts as a token of proof.

Then have exemption under section 10(14) or deduction under 80GG wihchever is applicable.

That amount of rent paid will be shown as Actual rental value while calculating GAV u/s23 of income from house property in hands of mother.

<> If the assesing officer accpets then it will be valid, if he thinks that this has been done to evade tax he will disqualify it as valid retun.

This is useful as no clubbing provisions apply.

If mother and son are on same slab rates, nothing chages, i mean no tax savings for the family.

mr vinay........

firstly, in this ques, one cn safely presume that salary has HRA component in it.

secondly, in sec 80GG, it is nowhere mentioned that assessee can't stay in his relative's house. the act says that assessee should nt hv any house in his name or in the name of minor child or in the name of HUF of which he is a member, at the place of his work or at the place whr he resides ordinarily. he may hv house at any other place, but it should nt b self-occupied.

thirdly, if he transfers house in the name of his mother and then start paying rent, it would b sort of similar to bond-washing transaction as in case of shares.

i follow TN.Manoharan and thats what it says about 80GG

I think yours is much acceptable, what is the reference book you follow priyanka ji

so what would you sujjest for this problem

and what is bond-washing, can you plz clarify on that

bond washing transaction is one when an assessee transfers his security in the name of any other person some time b4 the record date(so dat interest income is nt taxed in his hands) & then, some time after the record date, gets the same transferred back in his name.......

regarding the above problem, even i m nt sure.....will search 4 it......

Hi all,

It is possible to take benefit of exemption either under section 10(13A) i.e. for those employees who received HRA or Section 80GG i.e for those who paid house rent and doesnt receive HRA.

But the monetory exemptio under both these sections are different. so pls go throught the calculation correctly.

There is nothing in the act which prohibit the exemption under this section because of paying rent to relatives. So definately, it is possible to take benefit.

Regards,

Manoj

in TN.Manoharan it named this as revocable transfer under section sec63 as i remember

r both bond wasing and revocable transfer mean the same priyanka ji??

and plz let me know the reference book u follow

Originally posted by : Manoj B. Gavali
	Hi all, It is possible to take benefit of exemption either under section 10(13A) i.e. for those employees who received HRA or Section 80GG i.e for those who paid house rent and doesnt receive HRA. But the monetory exemptio under both these sections are different. so pls go throught the calculation correctly.   There is nothing in the act which prohibit the exemption under this section because of paying rent to relatives. So definately, it is possible to take benefit.   Regards,   Manoj

agreed

but will the assessing officer condone this, because the only reason behind this as one can expect is evasion of tax.

Did any tried this in  practical parlace

I would be thankful if any supporting evidence is provided if this has been done earlier

Dear Members,

Firstly we would like thank you for your efforts in resolving the present query. however there is contradictions in opinions given by different members.

we further clarify the case as under. We expect guidance on this aspect.

The said employee was in service on one company wherein HRA was part of his salary. in mid term he changed the job and with new company there is no HRA in salary.

In both the cases salary comes within the purview of taxable limit. assessee pays rent to father or mother with whom this assessee is residing. assessee does not have his own house.

1. can the rent paid make any effect to reduce the taxable income.

2. can assesee claimed any deduction on that ground.

3. what will be the effect on tax deduction of employee with both employers.

Regards to all members

In the given case, first of all, deduction under sec 10(13A) has to be calculated for the period upto the first job subsist. Section 10(13A) would be applied only when u received actual HRA. Since u informed that first employer provides the HRA as part of salary, Deduction would be allowed under section 10(13A).

For the second employer, no HRA is received and hence deduction would be allowed u/s 80GG since sec 80GG is applied for cases when House renty paid by assessee (assessee either as an employee who doesnt received HRA or self employed). Thus, for the second employer u have to calculate deduction u/s 80GG.

Thus rent paid for the period upto 1st employment subsist should be segregated from rent paid for the period during second employment. The first portion should be considered for exemption u/s 10(13A) and second portion for deduction u/s 80GG.

regarding ur queries.

1. U have to calculate the deductions under both this sections seperately and cant say anything whether, it will reduce ur taxable income or not. Depends upon the calculation given in sec 10(13A) and 80GG respectively.

2. Assessee can claim deduction even if the rent is paid to own parents.

3. Tax has to be deducted by the first employer after considering exemption u/s 10(13A) and second employer would calculate TDS after considering exemption u/s 80GG.

Regards,

Manoj