The Income Tax Appellate Tribunal, Delhi, recently ruled that House Rent Allowance (HRA) exemption under the Income-Tax (I-T) Act, 1961 cannot be denied on the ground that the assessee paid rent to his spouse. The ruling said that the wife is a doctor who possesses the resources to purchase a house, as is apparent from her income-tax return.
Many such situations arise where it is not clear if a taxpayer is eligible for exemption on HRA.
Rent paid to family members
Suppose that you live in your parental house. Can you pay rent to your parents and claim HRA benefit?