Key Points
The Income Tax Appellate Tribunal in India has allowed a house rent allowance (HRA) deduction of INR369,000 ($5,172) which was previously denied by the Income Tax Office..
Although nothing physically stops salaried taxpayers from claiming HRA exemption for rent paid to relatives, tax officers are examining the authenticity of such claims...
It held that an HRA deduction of 3.69 lakh denied by ITO, because payment of rent paid to his wife does not qualify for HRA exemption, should be allowed...
In 2013, the Ahmedabad bench of ITAT in the Bajrang Prasad Ramdharani case also allowed the HRA exemption claim made by the taxpayer, even though he paid the rent to his spouse..
Nothing debars a salaried taxpayer from claiming HRA exemption under Section 10(13A) for rent paid to a relative..
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