Sublease , HRA and Rent

Income Tax Act 1961 Income from Salary
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1

Hi,

Can my father sublease home owned by him to my mother who does not have any income, and thereby save on tax. Effectively, he will collect a smaller amount(For ex 5k) as rent ?
And then ,my mother sub leases to me at a premium and records as income from other sources while my father will pay tax on the nominal rent from my mother.

a. Can I claim HRA for paying rent to my mother?
b. Can I pay rent for whole year in one go and claim HRA? or it should be paid monthly basis?
c. Is there any potential issue if all of it is declared and filed?

2

You can claim HRA by paying rent to your mother if actual bank transfers and rent receipts exist, and she declares it in her ITR. However, creating a sublease arrangement between father and mother at nominal rates to absorb tax-free income risks triggering tax-clubbing provisions (Section 64) and audit red flags for artificial tax avoidance. It is recommended to keep rent transfers direct and at fair market values.