ITR Filing 2023: Even if you pay your spouse’s rent, you can reduce your income tax obligation by claiming an exemption on the house rent allowance (HRA) you receive as part of your salary. In reality, the Income Tax Appellate Tribunal in Delhi recently declared that the assessee’s eligibility for the HRA exemption under the Income-Tax Act cannot be disallowed because he paid his spouse’s rent.
HRA Exemption and Rent Payments Explained
In other words, a wife can pay her husband’s rent while claiming HRA exemption. Similar to this, a husband can provide his wife rent while also claiming a tax break under the terms of Indian income tax law. If the I-T department suspects you were engaging in sophisticated deception to avoid paying taxes, it may reject your claim. As a result, it is important to remember some guidelines. If you demonstrate to your employer that you pay your spouse a monthly rent cheque, you will also need to demonstrate her ownership of the property. She is eligible to receive rent in accordance with her share of ownership if she is a joint owner of the property. If a husband provides his wife with property, the wife will not be eligible to use the HRA exemption because the item will remain in the husband’s possession if the wife did not pay for it.
Essential Documentation for HRA Exemption
Be prepared to show documentation that you actually pay your spouse’s rent. For this purpose, their account statement that shows the monthly rent deposit is sufficient. Additionally, you can create rent receipts for every quarter and submit them to your human resources department. It may be difficult to claim the HRA exemption if you live in the same residence as your spouse. You cannot potentially share the space with the landlord in your capacity as the renter. Additionally, you must prove that you live apart.
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