HRA or House Rent Allowance is a grant provided by employer to employee to meet the cost of living in a rented house at the employer’s work location. Such HRA forms parts of the salary that employee receives from employer every month.
Least of the following is exempted:
Of course, you can! However, this is only possible if you have entered into an agreement with them and actually make the payment every month, preferably by cheque.
*Quick tip*: Avoid claiming tax benefits on rent payments made to the spouse as the arrangement can be characterized as a sham transaction, say experts.
Yes, you can. However, it is advisable to make bank transfers or cheque payments for future references.
Owner/Parent will taxed for the rental income after a 30% deduction. If they are retired and do not derive any significant taxable income, the rent would be tax free in their hands.
*Quick tip*: It gets better if the property is jointly owned by both parents. Then you can divide the rent two-ways so that the tax liability gets split between the two individuals.
*Quick tip*: If their income exceeds the basic exemption limit, you can help them save tax by investing in their name under Section 80C options
Yes, only where you are staying and paying rent as well. One of the cases this is frequently seen is where home is bought are in 2 different cities.
No, as you are not receiving a formal salary. However, you can claim a deduction under section 80GG of the Income Tax Act for the rent incurred on the residence.
Rent agreement or rent receipts is the proof. Please note that you will have to submit copies of rent receipts or rent agreement, depending on what your organisation stipulates.
Yes, if rent paid by you is more than Rs. 1 lac per year, you need to submit pan card details of the owner. In case the owner do not have Pan Card, a declaration will do.
No particular format for rent receipt has been specified, but please ensure it mentions the following relevant information:
If there are any further doubts that you may have, please reach out to us.