Can I have rent agreement in the name of my parents to avail tax benefit?
Yes Those who live with parents, can pay rent to their parents and save tax on HRA. HRA or house rent allowance is the most common allowance received by the salaried. Those who live in parents house can maximize on saving tax through HRA. Ownership of the house: Since rent is paid to owners, the property must be owned by your parents. It may be owned by one or both of your parents. Remember that you cannot be an owner or co-owner of this property since you cannot claim tax exemption on rent paid to yourself. Paying rent: You can pay rent to your parents by transferring money to their bank account or pay via a cheque. This way you will be able to claim your HRA deduction properly. Rent agreement and rent receipts: Usually employers ask for a copy of the rental agreement for their records. They can also request rent receipts to allow you HRA exemption. You can enter into a simple rent agreement with your parents. You can prepare rent receipts by creating a simple template on ms-excel