HRA query?

[mrinalrulz]

Hi Taxman,

To save tax, I have a rent contract with my mother wherein I am supposed to pay her the rent, which is slightly more than my HRA. However I have not paid any rent to her yet.

Query -
If I have not paid during Apr'07 to Mar'08 but show it as a loan in my balance sheet would I still be eligible for the HRA exemption.

Basically 10(13A) says rent paid over 10 % of basic+DA. does the word rent paid have any implications, since I have not actually paid but shown it as interest free loan from her to me.

Regards,
Mrinal

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[sameer_arora]

One of the limit for HRA exemption is Rent paid in excess of 10% of Salary.
Paid is the word here. Since you havent paid any rent you are not elligible to claim the exemption.