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Shakir
Shakir
Hardik

Hardik Parikh106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 31, 2023

Asked on - Jul 30, 2023Translate

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Hardik

Hardik Parikh106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 29, 2023

Asked on - Jul 28, 2023Translate

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Money
Hi sir. Hope alls well with you n ur family. Sir i am a 75 year old lady living in south mumbai. I hav given my PAGRI flat of which I am BENIFICIARY OWNER / SOLE TENANT on rent to my grandson for 49,500 per month. He is claiming HRA on same. For proof he is submitting rent agreement between him and me on notarized stamp paper, Electric bill which is on my name for ownership proof of said flat, My Pan card and bank passbook xerox of both of us showing rent given by him and received by me, To his company. I am also filling my IT return and showing rent as my income. Now i hear that pagri flats cannot be given on rent. Hav no other source of income. Pls advise. Greatfully yours ZARINA.
Ans: Dear Zarina Ji,

I hope you are doing well. I understand your concern regarding the rental of your Pagri flat.

The Pagri system is indeed a unique and complex aspect of Mumbai's real estate. As per the information available, there is no specific clause in the Income Tax Act that prohibits the renting of a Pagri flat. However, the legalities surrounding the Pagri system can be quite intricate and may vary based on specific circumstances.

In your case, as you are the beneficiary owner and sole tenant of the flat, and you are declaring the rent as your income in your IT return, it appears that you are following due process. Your grandson is also providing all necessary documents to his company for HRA claim, which seems appropriate.

However, I would strongly recommend consulting with a legal expert or a chartered accountant who is well-versed in the Pagri system and its implications. This will help you ensure that you are in full compliance with all legal and tax requirements.

Stay healthy and safe.

Best regards
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Hardik

Hardik Parikh106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 27, 2023

Asked on - Jul 26, 2023Translate

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Money
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.
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Sanjeev

Sanjeev Govila441 Answers  |Ask -

Financial Planner - Answered on May 22, 2023

Asked on - May 19, 2023Translate

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