Exemption of HRA Claim

[Lav Prajapati]

I would like to seek clarification on following issue

1. whether the location of the rented accommodation is mandatory to be in the same city as the company location for the purpose of HRA claim.

2. For claim exemption of HRA, we can pay rent our parent.

[TANAY GHILDIYAL]

The house for which you are paying rent should be in the same city as the place of location of your job. If it is in 2 different cities , exemption cannot be claimed ( even if your parents are showing that income in their returns).

Yes, in case you are paying rent to your parents and you have a formal lease agreement, then you are eligible to claim HRA. 

Tanay Ghildiyal 

9873938771

[K.lakshmipati rao]

House Rent Allowance (HRA) is exempt u/s 10(13A) of I.T. Act and Rule 2A of I.T. Rules, subject to  that the rented premises must not be owned by Assessee and, on actual payment of rent regularly on monthly basis for the house [which he occupies by reason of the fact that owing to his employment] resides at other place in a building not belonging to him.

Exemption is also available even if the rented house is owned by his/her parents, subject to actual payment of rent regularly on monthly basis [through bank transfer entry for evidence] and collect a receipt for HRA claim [Refer to Bajrang Prasad Ramdharani Vs. CIT - 2013 (8) TMI 103 - ITAT AHMEDABAD. However, similar rules don't allow against payment of rent to spouse and claim a tax exemption.

[Lav Prajapati]

@TANAY GHILDIYAL

Can you provide any reference in respect of like instruction, press release, notification , circular etc. ?

[K.lakshmipati rao]

I would like to draw your attention to read I.T. Rules,1962-Rule 2A [2* Limits for the purpose of Section 10(13A)] -at Page 1.2 and, Taxmann's Direct Tax Ready Reckoner- Para13.1 in Page No.A-24, for ready reference.

AI Summary

HRA Exemption: Rent Accommodation Should Match Job City; Pay to Parents Allowed with Proof, Not Spouse. A discussion on the exemption of House Rent Allowance (HRA) clarified that the rented accommodation should ideally be in the same city as the job location to claim HRA exemption. Rent can be paid to parents if a formal lease agreement exists, and regular monthly payments are made, with evidence such as bank transfers and receipts. References to specific tax rules and cases were mentioned to support these claims, emphasizing that rent paid to a spouse does not qualify for exemption. Participants requested further references for these guidelines.