• HRA limit

I own a private limited company and we'll be doing our first payroll this month. My brother is also a director in the firm and we intend to pay him his first salary this month which constitute of 158900 as basic pay and 63,560 as HRA. The HRA amount is close to 40% of the basic pay. My brother will be sending around 80000 Rs every month to my father who owns the house and we intend to do a rent agreement as well. Are there are tax evasion issues on this plan? I just want to make sure that we aren't doing anything illegal.
Asked 10 days ago in Income Tax

Where is your father staying?

Are you actually using that house to live?

Is there any rent agreement?

There have been instances where Income tax has asked for documents of rent to check taxability.

If you are paying such high rent will your father show such income in his income tax return as the company will have to report PAN of landlord.

 

Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4065 Answers
70 Consultations

5.0 on 5.0

It is fine

Vivek Kumar Arora
CA, Delhi
4493 Answers
621 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA