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: "Pagri flats" typically refer to properties where the tenant (in this case, you) pays a lump sum amount to the landlord (previous owner) as a security deposit, and then the tenant continues to live in the flat without any formal lease agreement. The ownership and legal status of Pagri flats can be complex and may vary depending on local laws and regulations.It's important to clarify the legal status of the Pagri flat in terms of its rentability. If Pagri flats are not legally allowed to be given on rent in your area, you might need to address this situation. In many cases, renting out properties in violation of local regulations can have legal consequences. From a tax perspective, if you are indeed receiving rental income from your Pagri flat, you should be reporting it in your income tax return. You can offset this income by claiming deductions on expenses related to the property, such as maintenance, repairs, and property taxes. However, if the property is not legally rentable, there could be complications in terms of both tax and legal compliance.
Your grandson claiming HRA (House Rent Allowance) for the rent he's paying you might raise concerns if the property is not legally rentable. HRA is usually claimed when an individual pays rent to a landlord other than a close relative. Since you are his grandmother, the relationship might fall under the category of a close relative.
