Rent Paid To Father Can Be Claimed As Exemption For Purpose Of HRA

There is no restriction under the income tax laws as to whom you can pay rent in order to claim exemption for HRA. What is required is that you should be paying the rent for the accommodation occupied by you and the premises should not be owned by you.

So, even if you pay rent to your father, you can claim exemption in respect of HRA received by you within the limits of rule 2A of the Income-tax Act, 1961.

You will have to submit the Permanent Account Number (PAN) of your father to the employer if the aggregate rent for the year exceeds Rs 1 lakh. The benefit of HRA is available only if you opt for the old tax regime. You can claim HRA exemption and home loan benefits if you own a house taken on home loan and let it out for rent.

In respect of the let-out house, the rent receivable by you will be taxable under the provision of income tax laws.

From the rent received, you will get a flat 30 per cent deduction for repairs etc. in addition to the interest on home loan for the year.

In case you opt for old tax regime, you will be able to claim full deduction for interest paid. However, you can set off loss only up to Rs 2 lakh against other income during the year, and the unabsorbed loss is allowed to be carried forward for eight years to be set off against house property income.

If you opt for the new tax regime, you can claim interest to the extent of taxable rent as you are not allowed to claim set-off of any loss under the head of house property.

You cannot claim any tax benefits in respect of money gifted by you to your wife out of your income, as this is treated as application of income.

The same will not be taxable in your wife’s hand, as gifts received from specified relatives, including spouses, are exempt and not treated as income under Section 56(2) of the Income-tax Act, 1961. Please note that in case your wife invests the money gifted by you, the income arising on such investment will be clubbed with your income.

Under Section 80D of Income-tax Act, 1961, a person is entitled to a deduction up to Rs 25,000 in respect of amount of insurance premium paid for health insurance for self, spouse and dependent children.

You can also claim an additional amount of Rs. 25,000 for insurance premium paid for health insurance of your parents, whether they are dependent on you or not.

The deduction in respect of senior citizen is higher at 50,000 in a year in each of the above category. Within this overall limit, a deduction of Rs. 5,000 is available for amount spent on preventive health check-ups.

Though your daughter’s employer provides the health insurance, you can claim an amount up to Rs 5,000 paid for regular health check-ups.

Please note that this deduction is available for health check-ups and not for buying medicine etc. The deduction is available only if the amount is spent for preventive health check-ups. So, in my opinion, any expenditure incurred for check-ups as part of regular treatment will not be available for deduction under this category.