Can You Pay Rent To Parents Or Spouse And Claim HRA Benefits?

Most of you must be aware that if you are residing in a rented accommodation and your company is giving you house rent allowance (HRA) as a part your salary, you can claim HRA deduction equivalent to the least of the following:

1) Actual rent paid

2) Basic pay minus 10 per cent of rent paid
3) 50 per cent of the salary, if staying in a metro or 40 per cent of the salary, if staying in a non-metro

But many of you may not be aware of the following rules

1) You can pay rent to your parents and claim HRA deduction if your parents own that property. But they will have to show the rent as income from house property. But if you are staying with your parents in a rented accommodation and they are paying the rent, you can't claim the HRA deduction.

2) You can't pay rent to your spouse and claim HRA deduction.

3) You can claim both HRA and home loan deduction of Rs. 1.5 lakh against principal repayment and Rs. 2 lakh against interest paid, if you are staying in a different city due to job posting.

4) Even if HRA is not part of your salary, you can claim an HRA deduction under Section 80GG. This Section is applicable for those who don't receive HRA as part of their salary and self-employed individuals.

5) You can claim HRA under this Section by filling up a Form 10BA. You can only claim HRA under this Section only if you are staying in a rented accommodation and paying rent. This house shouldn't be co-owned by you and also you don't own any house in the same city.