My son has started working recently. Can he pay rent to me and claim tax exemption for the house rent allowance (HRA)? What will be the tax treatment for the rent that I receive from her?— Shiv Patel
Yes, your son can pay the rent to you and claim HRA exemption for the same. The HRA exemption is the least of the following:
Actual HRA received or actual rent paid minus 10 per cent of basic salary or 40 per cent of basic salary (50% in case you are living in a metro). However, the rent he pays you will be included in your income for the year under the head ‘Income from house property’. The entire amount is not taxable as you can avail of a standard deduction of 30 per cent for the maintenance of the property and pay tax on the balance.