Hi sir . Wishing you and your family the best in life. Sir i am a 75 year old lady living in south mumbai. I hav given my pagri flat of which i am sole owner on rent to my grandson for 49,500 per month. He is claiming HRA on same and I am also filing my tax returns . Someone told me i cant give pagri flat on rent according to IT rules. Pls advise.

Ans: Dear Shakir,

I hope you and your family are in the best of health and spirits.

Coming to your query, the Pagri system is a unique form of tenancy prevalent in some parts of India, including Mumbai. In this system, the tenant has certain rights over the property, but the ownership remains with the landlord.

As per the information available, there is no specific clause in the Income Tax Act that prohibits the renting of a Pagri flat. However, it's important to note that in the Pagri system, only tenancy rights can be transferred, not the ownership of the property.

In your case, as you are the owner of the flat, you can certainly rent it out to your grandson. The rent you receive from your grandson would be considered as your income and should be reported in your Income Tax Returns. Your grandson can claim HRA (House Rent Allowance) benefit on the rent he pays to you, provided he satisfies the conditions laid down for claiming HRA.

However, I would advise you to consult with a tax consultant or a chartered accountant to understand the complete tax implications based on your specific circumstances.

I hope this information helps.

Stay healthy and safe!

Best regards.