• How to get benefit of house rent allowance for IT

Sir, I was the joint owner of Flat. First Owner is my father,second owner is me. The total purchase cost paid by my father for inconvenience in future I was added on agreement. My Father expires. Nomination of my mother were not done. Her name is not on property papers. As per the act, whether she can claim 50% Share of ownership?. Can I pay a House rent to her and can get benefit for Income tax. Whether it is valid?
Waiting for reply. thank you.
Asked 1 year ago in Property Law from Nalasopara, Maharashtra
Religion: Hindu
1) since your father died intestate on your father demise his 50 %share will devolve on you and your mother equally 

2)  both have equal right to enjoy the property. No one is bound to pay rent to the other

3) it would appear to be a strategy to avoid taxes 
Ajay Sethi
Advocate, Mumbai
23367 Answers
1224 Consultations
5.0 on 5.0
After your fathers death intestate(without any will) all his ownership gets equally divided into all his successors which includes your mother as well as you. So your mother cannot seek 50% ownership unless you relinquish your rights accrued from your father's share. 

Where part ownership is already in your name you cannot pay rent for such property to another person and claim deduction. 
Saptarshi Banerjee
Advocate, Kolkata
183 Answers
4 Consultations
4.9 on 5.0
1) on your father demise your mother is one of the legal heirs 

2) she would have  25 per cent share in flat and be co owner of flat  

3) both have right to stay in said flat 

4) where is question of paying rent to your mother 

5) income tax authorities woul disallow your claim 
Ajay Sethi
Advocate, Mumbai
23367 Answers
1224 Consultations
5.0 on 5.0
A. After the demise of your father without a Will, all class I legal heirs are the absolute owner of the property. Hence, your mother can claim a share over the 50% share in the property.

B. If you live in a Rented House you are eligible for something called House Rent Allowance and this has tax benefits. 

C. Payment of Rent to Parents for House Rent Allowance: This is a tricky question. Legally there is nothing stopping you from doing this but this is a concept that is frowned upon because effectively this amounts to cheating. In real life - would we really pay rent to our mom or dad? this is crucial issue. 

Anyways, if you insist on going this route, you need to understand that if your tax returns get audited in future, you would have to answer the tax officials on why you claimed as if you are paying rent to your own parents plus prove that you actually paid rent. Otherwise - the penalties you will pay and the consequences would be much worse than the few thousand rupees of tax you will save. 

If you wish to go this route - as a first step, you would need to apply for a PAN Card for your mom (on whoever's name you want to pay rent). Only the person on whose name the house is registered can receive rent. If you want to show rent to your mom who is a housewife - that is not allowed. After this you would have to sign a rental agreement on stamp paper and register the same for the amount of rent that is nominal for your area plus the size of your respective share. Once done, you must make sure to formally transfer the rent to your mom account plus ask them to issue a rent receipt so that you can use the same for tax filing purposes. (Sources Mr. Anand Vijayakumar blogspot).
B.T. Ravi
Advocate, Bangalore
736 Answers
31 Consultations
5.0 on 5.0
1. After the demise of your father his widow and children have inherited his share equally. The absence of her nomination does not abrogate her share. So she is free to file for partition to cull out her share in the share of your deceased father. 

2. How will you show yourself as a tenant in the house when you have more than 50% of its ownership?
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
No IT benefit can accrue to you as being the owner of at least 75% share in the property you cannot show yourself as the tenant. 
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
1. You have two questions. The first one is "  can your mother claim 50% Share of ownership of the flat?"  and the second one is "Can you pay a House rent to her and can get benefit for Income tax?",

2. No. Your mother can not claim 50% share of the flat. She can claim 50% share of the 50% share of the flat of your faher i.e. she can claim 25% share of the total flat,

3. You already have a flat jointly owned by you. If the area of the said 75% share of the flat is inadequate for you, then only you can pay house rent to her for her said 25% share of tha flat and claim I.T.Relief.   
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
1. Yes, you can pay her rent for taking on rent her 25% share of the said Flat,

2. Though her name is not in the property documents, she will own 50% share along with you for your father's share of 50% of the said Flat. 
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0

Ask a Lawyer

Get legal answers from top-rated lawyers in 1 hour. It's quick, easy, and anonymous!
Ask a Lawyer

Property Lawyers

T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
5.0 on 5.0
Ajay Sethi
Advocate, Mumbai
23367 Answers
1224 Consultations
5.0 on 5.0
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
Devajyoti Barman
Advocate, Kolkata
5248 Answers
54 Consultations
4.9 on 5.0
Atulay Nehra
Advocate, Noida
443 Answers
15 Consultations
4.7 on 5.0
Shivendra Pratap Singh
Advocate, Lucknow
2771 Answers
41 Consultations
4.9 on 5.0
Rajgopalan Sripathi
Advocate, Hyderabad
873 Answers
43 Consultations
5.0 on 5.0
Ajay N S
Advocate, Ernakulam
1916 Answers
19 Consultations
5.0 on 5.0
S J Mathew
Advocate, Mumbai
1954 Answers
65 Consultations
5.0 on 5.0