Regarding HRA, can a tenant give rent receipt to other tenants?

Context: We are three tenants staying at a rented flat in Bangalore. The rental agreement is between landlord and tenant A, in which tenants B and C are listed as 'friends' who stay there, and the total monthly rental is Rs. 29,000. 
Every month, tenants B and C pay their shares of the rent (Rs. 9,667 each) to tenant A via online transactions, who in turn gives the total rent amount to the landlord via online transaction. The landlord insists that he can only give the rent receipt for the full amount to tenant A, and refuses to give split rent receipts to A,B,C separately.

1. Can tenant A give rent collection receipts to tenants B and C for their shares of the rent? 
Can B and C use this receipt for their HRA claim?
2. Is the rent amount collected by tenant A taxable income for him?

Asked 2 years ago in Income Tax from Bangalore, Karnataka
Hello Sir,

1. No. Tenant A cannot issue Rent Receipt to Tenant B or C, as he is not the rightful owner nor is there an agreement for Subletting.

2. No. The Rent amount is not taxable in the hands of Mr. A, as he is just the intermediary who collects the amount and transfers the same. (But if Mr.A, claims the whole amount as his rent i.e the total amount of Rs.29,000/- then the share of Mr. B & Mr.C will be taxable in his hand under the head Income from Other Sources.

Feel Free to get back for any further clarifications.

Thanking You.

CA Rohit R Sharma

Rohit R Sharma
CA, Mumbai
2075 Answers
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  Talk to Rohit R Sharma
Dear Sir,

1) In your case Tenant A can not give rent receipt for rent collected form B or C (If he do so he has to consider as his rent income and offered the same for tax) - However B & C Can claim the HRA Benefit by producing photocopy of rent receipts received by A claiming 1/3rd portion of it as rent paid.

2) No in routine case the amount collected by A shall not be taxed in hos own hands unless A starting issuing rent receipts in his own name.
Vishrut Rajesh Shah
CA, Ahmedabad
605 Answers
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  Talk to Vishrut Rajesh Shah

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