Do you pay Rent to your parents to claim House Rent Allowance (HRA) deduction under income tax act ?

Most of you must be aware that if you are residing in a rented accommodation and your company is giving you HRA as a part your salary, you can claim HRA deduction.

But many of you may not be aware of the following points:

You can pay rent to your parents to claim deduction under section 10(13A) with the condition that, you should have solid supporting evidence. In a case of Meena Vaswani (assessee.) v. ACIT (2017) assessee had paid rent to her mother. In consideration mother charged rent and assessee took rent receipt only. There was no written proof with assessee that she has taken property on lease. Income tax authority had disallowed the claim of HRA.

Let’s see the kind of evidence you should keep to satisfy your income tax officer:

  1. Rent agreement,
  2. letter to society intimating about his tenancy,
  3. Payment through bank,
  4. Cash payments with known sources,
  5. Electricity bill payments through cheque,
  6. Water bill payments through cheque,

These evidence are arising in normal course of happening of transaction of hiring of premises. If it is not maintained you would loose eligibility of deduction.

Keep reading! And reach out to us if you have any queries and you are looking for an CA in Gurgaon, Faridabad, Delhi for further clarification.


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