HRA Tax India – Can I Pay Rent to Wife?

Yes, you can pay rent to wife or parents to claim Indian HRA (House Rent Allowance) tax exemption. Paid rent is counted as spouse or parent income. File ITR.

Anil Gupta
  By Anil Gupta    Updated  30 Dec, 20


Yes, you can pay rent to my wife or spouse or parents to claim the HRA tax benefit in India.

In the eyes of Income-tax, each individual is a separate entity and hence can have his own income.
You can pretty well pay the rent to your spouse and claim the HRA tax exemption for your income.

Rent Is Income of Wife/Parents

The only thing to consider is the rent paid should be counted as INCOME for the spouse or the parents.

If your spouse or parents do NOT have any other income source, then this INCOME (rental) could be pretty beneficial.


Indian HRA Tax Calculator >

On one hand, they might not even cross the minimum income tax slab to be required to pay any tax. Currently, people with a total yearly income of INR 2,50,000 need not pay any income tax.
On the second hand, you are claiming tax exemption on this rental amount.

This way, the tax saving remains within the family.

Can I pay rent to myself for self Occupied Home?

If you are staying in the home that you own, then you can’t show the rent as ‘paid’ to yourself. This is NOT allowed as per Indian tax law.

How to Prove Rent Paid to Wife or Parent?

If you are paying rent to your parent or spouse, there should actually be a valid transaction (Bank payment is preferred) that shows the flow of money from your account to their account.

Documents Required for Showing Rent Paid to Family Member?

You need the documents like rent receipts and a valid rent agreement to prove rent payments between you and your family member.

This would be required if the income tax officer questions your intent.

Many people who stay with their in-laws can create a registered rent agreement and keep paying the rent to their mother or father-in-law.

A family member’s PAN number would be required to claim the HRA tax exemption.

Can I pay rent to my wife how is joint owner in self occupied property?

You can legally pay rent to your wife even if she is a joint owner of the property. The only thing to note is that she can receive rent only for the portion of the property she owns.

For example, if your wife owns 50% of the property rights, then she can only receive 50% of the total market rent rate for that property.

Note that even though you are claiming HRA benefit using this technique, it is really difficult to prove it to the Income-tax auditor if they decide to check your case.

Normally, your employer may also not approve your HRA tax exemption claim if you cannot produce rent receipts along with your PAN number.




Author

Anil Gupta
  By Anil Gupta           

Recent discussion on forum

  1. AM22Tech_Admin
    AM22Tech_Admin

    Hi, me and my wife living in Delhi on a rented property. if I show that I am giving rent to my wife to have the HRA tax exemption even if that house is not her property, will I get the HRA tax exemption.
    She is house wife and this rental income will help her to have some income and that can be shown at the time of ITR filing for her. please explain in details.
    Thanks


  2. anil_am22
    anil_am22

    I don’t suggest to do fraud like the way you are thinking of doing. Sorry.


  3. AM22Tech_Admin
    AM22Tech_Admin

    Thank you Anil but please also explain me the scenario in which is can pay rent to my wife or to my parents by which I could get HRA tax exemption.


  4. anil_am22
    anil_am22

    Everything is explained in above article.


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