Rental agreement with Parents for HRA

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student
334 Points Posted on 11 March 2021
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..?
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On 11 March 2021 at 11:07 Report
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Quick Summary
This discussion explores the possibility of a salaried employee claiming House Rent Allowance (HRA) exemption by entering into a rental agreement with their parents. The employee lives with their parents in a house owned by them and proposes paying a rent of £15,000 per month for the entire house to claim tax benefits. The core question is whether this arrangement is legal and acceptable under income tax laws, especially since the parents would continue to reside in the property.

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17269 Points Posted on 11 March 2021
Home is owned by parents. So rent payment for full house is not genuine and acceptable. your friend may pay lumpsum for house rent.
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On 11 March 2021 at 13:08
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student
334 Points Posted on 11 March 2021
Thank u sir. Now Market rate is Rs.7,500 per month for one floor. Can I take rent of only one floor and make agreement for 15,000 for one floor. Will that be ok...?
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On 11 March 2021 at 13:11
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17269 Points Posted on 11 March 2021

You have to decide what you want to do, how you want to consider !! Here, No such questions for academic purpose. 

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On 11 March 2021 at 14:55
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student
334 Points Posted on 11 March 2021
Thank u sir
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On 11 March 2021 at 16:01

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