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If you send money to your mother, will you save billions in taxes? Here’s the solution.

Sagar Patel

By Sagar Patel

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Sushmit Lala lives in his own house with his family in Delhi. Therefore, they are unable to avail the tax exemption available on house rent subsidy. Later, one of his friends Ankit Mishra explained to him why he does not pay rent to his parents. With this, he will be able to earn tax-free income of up to Rs 99,000 per year. When Mishra told this method to Lala, Ankit was shocked whether it was actually possible. If the same question comes to your mind, then this story is for you.

If you come from a middle or lower class background, it is quite likely that you send money home every month. But many people do not know how to send the money home. You can also save taxes through it. You can also make your income tax-free up to Rs 99,000 by paying rent to your parents every month, and your parents will not have to pay taxes on this rent either.

Pay a rent of Rs 8,333 every month.

No matter how much rent you pay outside, if you pay a rent of Rs 8,333 to your parents every month, then you will get two benefits. First, you will be able to avail the tax exemption available on the house rent subsidy. Second, your income of about Rs 99,000 will be tax-free.

There will be no fiscal tension

Now you will also be worried that your parents will not pay tax on the rent you pay. So let us tell you that this will not happen. In fact, in the tax exemption available on house rent subsidy, for rents up to Rs 8,333 per month, there is no need to provide the details of the landlord (in this case, your parents), such as PAN card, to the Income Tax Department. In such a situation, this income can also be tax-free for them.

Let us tell you that the benefit of tax exemption on house rent subsidy can be availed only in the old tax system. The tax exemption limit in this case is up to Rs 5 lakh. Whereas in the new tax system the tax exemption limit is maximum of Rs 7,50,000. In case you do not get the benefit of house rent subsidy, tax exemption on other savings.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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