You can save Rs 99,000 in income tax by giving money to your parents, taxpayers should know the way..

Sushmit Lala lives with his family in his house in Delhi. Therefore, he is unable to avail tax exemption on house rent allowance. Later, one of his friends Ankit Mishra suggested why he does not pay rent to his parents.

This will make his annual income up to Rs 99,000 tax-free. When Mishra told Lala about this method, Ankit was surprised whether this is possible. If you also have the same question in your mind, then this news is for you.

If you are from the middle or lower class, you must be sending money home every month. But many people do not know how they can save tax on the money they send home. You can make your income up to Rs 99,000 tax-free by paying rent to your parents every month and your parents will not have to pay tax on this rent.

Pay rent of Rs 8,333 per month-
No matter how much rent you pay outside, if you pay Rs 8,333 rent to your parents every month, you will get two benefits. First, you will be able to avail tax exemption on house rent allowance. Second, your income of about Rs 99,000 will become tax-free.

There will be no tension of tax-
Now you will also be worried that the tax on the rent paid by you can be recovered from your parents. So let us tell you that this will not happen. Actually, in the tax exemption available on house rent allowance, there is no need to give the details of the landlord (in this case your parents) like PAN card to the Income Tax Department for rent up to Rs 8,333 every month. In such a situation, this income can also be tax-free for them.

Let us tell you that the benefit of tax exemption on house rent allowance can be availed only in the old tax system. The limit of tax exemption in this is up to Rs 5 lakh. Whereas in the new tax system, the maximum limit of tax exemption is up to Rs 7,50,000. In that, you do not get the benefit of tax exemption on house rent allowance or other savings.