Paying rent to mom-in-law? She has to pay tax on it and you can claim HRA

Published: October 1, 2019 1:06:56 AM

In case your return is not processed for a long period of time, you can file a grievance using the ‘e-nivaran’ facility on the income tax website.

The beneficial period of 12 months shall not be applicable.

By Chirag Nangia

 I pay rent to my mother-in-law every month. Is this rental income taxable (I’m her relative) in her hands? She owns another house where she lives. Can I claim HRA for the rent I pay her?
– S Verma

The amount paid to your mother-in-law is not in the nature of gift but rental income for occupying a residential accommodation. Such amount shall be taxable in the hands of your mother-in-law as ‘income from house property’ and shall not be treated as gift. Since you do not own the residential house, you shall be eligible to claim HRA for the monthly rent paid to her, subject to the prescribed limits.

 For foreign Restricted Stock Units (RSU) held by Indian citizens, can we adjust short term gain with short term loss for Foreign RSU held in India? What are the rules for short term and long term gain adjustment?
—Jayesh Poria

Losses arising from transfer of short term capital assets can be set off against short term capital gains as well as long term capital gains. However, long term capital losses can only be set off against long term capital gains and not against short term capital gains. Further, the gain/loss shall qualify as ‘long term’ only if the RSUs are held for a period more than 36 months. The beneficial period of 12 months shall not be applicable.

 I sold a residential property for Rs 56 lakh and made Rs 11 lakh as long-term capital gain (LTCG). The tax on capital gains is about Rs 2.5 lakh. I want to invest under Section 54 EC for tax exemption. Should I invest the taxable amount which is Rs 2.5 lakh or the entire capital gains of Rs 11 lakh to claim exemption?
—Altamash Md

In order to claim exemption under Section 54EC, the assessee is required to invest the whole or any part of capital gains in long-term specified asset. Hence, you shall be required to invest Rs 11 lakh.

I have filed my ITR1 on May 15, 2019 and e-verified it. I got my full refund on July 30 but till date my ITR has not been processed. What can be the reason?

Refund claims are settled before processing of return. It is advisable to wait for some time for processing of return. In case your return is not processed for a long period of time, you can file a grievance using the ‘e-nivaran’ facility on the income tax website.

The writer is director, Nangia Advisors LLP. Send your queries to
fepersonalfinance@expressindia.com

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