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

House Rent Allowance: paying rent to an HUF can permit HRA exemption under the applicable provision; HUF may claim the standard deduction. Section 10(13) does not apply to House Rent Allowance; HRA exemption is claimable under the applicable HRA provision where an individual pays rent to a HUF. Rent received by the HUF is taxable as income from house property and the HUF may claim the standard deduction available for let-out property under the income tax provisions.