Hii guys
My Friend is a salaried employee. Total salary is 9 lacs. His basic salary is 3,20,000. No DA. HRA portion is 1,60,000. Now he is staying with his parents. And he has a brother. All of them stay in same house. His parents own the house.
Now my doubt is can I make a rental agreement between my friend and his parents for the full house for a rent of 15,000 (Standard rent in that area) and claim HRA exemption of apprx 1,20,000. It's like their parents gave the entire house for rent. But his parents will live in that house only. This arrangement is only for tax planning purpose.
Plse suggest me if it is legal or allowed as per income tax..?
CAclubindia
