Can I Pay Rent to Wife or Parents to Claim HRA Tax Benefit?

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.

Written by Anil Gupta
  By Anil Gupta          Updated  14 Jun, 19


Yes, you can pay rent to my wife or spouse or parents to claim 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 Paid to Wife or Parents Is counted as their Income

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

This way, the tax saving remains within the family.

You Can’t Pay rent To Your Self in Self-occupied Home

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

Prove Rent Paid to Wife or Parent with Bank Transaction

Also, 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.

You also need the other documents like rent receipts and a valid rent agreement to prove rent payments.
This would be required if the income tax officer questions your intent.

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