I have been trying to find creative and legal ways to save tax money. A friend of mine shared a secret with me that he pays rent to his mother each month and deposits the amount in her savings account. It helps him save money at the end of each financial year. I asked him, `Can I claim HRA for rent paid to parents’?
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Many salaried individuals live with their parents or relatives. Getting to the point, yes, you can claim an HRA allowance if you pay rent to a family member. Even though the rental income stays within the family.
You just need to make sure the family member/ parents own the property. Your parents will need to show the rent as income from the house property. In case you are staying with your family in rented accommodation, you will not be able to pay them to rent and claim an HRA deduction.
Can we claim HRA by paying rent to parents?Yes, now that I have established that you can claim HRA by paying rent to your parents. Let me share certain circumstances to claim your tax relief. You can claim HRA up to Rs 3,000 per month even without any sort of rent receipts. If your rent exceeds Rs 3,000, you will not be able to claim HRA without rent receipts.
There are certain benefits of claiming HRA while staying with family:
You will be able to save tax as a family.
Your parents can take advantage of the situation by opting for deducting property taxes by claiming a 30% standard deduction on the rental income.
If your parents are more than 60 years old, they can enjoy a higher minimum income exemption limit (Rs.3 lakh ).
If your parents are more than 80 years old, they can enjoy a higher minimum income exemption limit (Rs.5 lakh ).
If I learn anything new on the topic of ‘can I claim HRA for rent paid to parents. I will leave a comment.
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This was a new thing for me to know how can one claim HRA if he or she stays at their parents' house. Believe it or not, it is possible. I know many of you too might be trying to find the answer to- “Can I pay rent to my parents in cash and claim HRA” or not, so let me tell you that you can. There is, of course, a list of criteria that you need to follow before claiming the HRA. I have researched this topic in detail, so let me highlight some of the aspects of it here.
Can I claim HRA for rent paid for parents?HRA, or house rent allowance, is the allowance that a salaried individual receives. People living on rent can maximise their savings tax by claiming a deduction for HRA from their salary. So if you are wondering whether you can claim HRA for the rent you pay to your parents, learn that yes, you can. But there are certain conditions you must follow-
You can pay the rent to your parents only if you are staying with them
The rent must be paid to their bank account or via a cheque as a record of proof
The property must be owned by your parents
Just remember that in any case, you cannot be the owner or co-owner of the property, as you cannot claim tax exemption on rent paid to yourself or for your property by you only.
I hope this clarifies when can I claim hra for my parents house.
What is the limit of rent paid to parents?One can claim HRA for a monthly rent of up to Rs 5,000 as per Section 80GG.
This is all I can say to answer the query- can I pay rent to my parents in cash and claim HRA?
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HRA is a boon for salaried employees like me. It is an allowance that is received by all salaried employees known as the House Rent Allowance. People like me who haven’t yet achieved their dream of owning their own house and living in a rented house can maximise their savings on tax by claiming HRA deduction from their salary.
But I live with my parents so I was wondering can we claim HRA for parents house or not. I did some research and found out that salaried employees who live with their parents and pay rent to their parents can claim HRA and save tax on HRA.
So, if you too are wondering can I claim HRA by paying rent to parents, the answer is yes. But it is important that you know how you can do so.
You can pay rent to your parents if you are staying with your parents.
This should be done by transferring the money (rent) to their bank account or paying via a cheque. This way you will be able to claim your HRA deduction properly.
Since rent is paid to owners, the property must be owned by your parents. It may be owned by one or both of your parents. So, you can deposit the money to any one of the parents in case of joint house ownership, or to the parent who is the legal owner of the house.
Remember that you cannot be an owner or co-owner of this property since you cannot claim tax exemption on rent paid to yourself.
Now you know
can I pay rent to my parents for HRA or not and also how you can claim it.
Get rent receipts online by paying your rent through NoBroker today Read More: Can You Claim HRA for Rent Paid in Another City 2023 How Much HRA Can be Claimed Without Proof? How to claim HRA if not mentioned in form 16?
Can I pay rent to my parents and claim HRA?
Srijan
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September 2, 2021
2021-09-02T18:52:16+00:00 2023-08-24T19:48:06+00:00Comment
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