the taxpayer, interestingly, even if shared with his wife and family and payment of rent supported by adequate documentation). These facts were duly confirmed by the lower authorities and, hence, the exemption ought to be allowed.
While this will be an applauded clarification for assesses paying rent to their spouses (and could be extended in the context of other family members), one may want to examine its applicability and apply the ruling with caution vis-à-vis situations where the rental income is taxable in the hands of the tenant under the clubbing provisions; after confirming of the tax rates applicable to both the taxpayer and the spouse; and based on the supporting documentation.
In either case, it may be advisable to seek a fact specific consultation as the taxman for now may not be set to allow this exemption.
(The writer is associate director, Tax & Regulatory Services, EY. Views expressed are personal)