Rent paid to wife and wife has paid actual rent

Are you both showing the rent paid for the same house?

Hi Giridhar

Many Thanks for the reply

My Wife is not working. The situation is as follows:-

Me :- I pay rent to Wife. Wife has entered into agreement of Leave and Licence with owner of the rent.

Wife:- She is not working. Excess amount received from me over actual rent paid to owner shows as Income.

Q:- Will I eligible for HRA If my Wife issue Rent paid receipts?

      Can My wife shows such excess amount from me as Income from Other Source?

Dear Sanket,  HRA exemption can be claimed only if the rent is paid to the person who is the owner of the property & you are taking Rent Receipts each month from the owner.

As your wife is not the owner of the property for whihc you are paying rent and showing it is paid to your wife, you cannot claim the HRA exemption. 

As your wife is not working, then what is the purpose of paying the rent to your wife, wife paying it to the landlord & your wife showing excess amount as income.  why don't you directly pay the rent to the landlord and claim the exemption for HRA.  also showing rent paid to wife would not be a proper tax planning as husband & wife normally stay in one house together.  However if it is shown that rent is being paid to the either  parent of you or your spouse then that would not create an problem.

Agreed with Mr. Giridhar

Hello

If I pay to my Parents and if they inturn paid to Owener, will than be allowed under Income Tax? My Parents will show execess amount received as Income from Other sources.

Thanks

Sanket

Mr. Sanket,

Rent paid by you to your parents will qualify for deduction subject to the condition that your parents are showing the same as a subletting income under section 56.

It would be better to have a subletting agreement with your parents.

Also in my opinion show all these transactions by an account payee cheque or draft only with the use of rent receipts.

This is my personal opinion.

No offence to other replies.