HRA Taxability

[Lav Prajapati]

I am a salaried employee and want to purchase a flat for my residence. From the taxation point of view, will it be advisable to purchase the same in my name or in my HUF’s name. My further query is whether the HUF can charge any rent from me? If so, can I claim exemption from tax allowable under Section 10(13) on the house rent allowance being paid to me by my employer and also whether the HUF will get the standard deduction of 30% u/s 24b on the rental income received by it.

[DR.MARIAPPAN GOVINDARAJAN]

Section 10(13) of the Income Tax Act does not deal with the HRA.

[Manish Kumar]

You can pay rent to HUF and claim HRA exemption u/s 10(13A). And HUF will get 30% deduction u/s 24(a).

AI Summary

Salaried Employee Can Pay Rent to Their HUF and Claim HRA Exemption Under Section 10(13A) A salaried employee inquired about purchasing a residential flat, questioning whether to buy it personally or through their Hindu Undivided Family (HUF). They asked if the HUF could charge them rent, whether they could claim HRA exemption under Section 10(13A), and if the HUF would receive the standard 30% deduction on rental income. One respondent clarified that Section 10(13) doesn't address HRA, while another confirmed the employee could pay rent to their HUF and claim HRA exemption, with the HUF eligible for the 30% deduction under Section 24(a).