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Paying rent to spouse or parents for HRA? Draft tax rules add a new disclosure. Check impact
4 min read | Updated on February 22, 2026, 13:02 IST
SUMMARY
New HRA disclosure rule proposed in draft Income-tax Rules 2026. The mandatory disclosure of tenants' relationships with their landlords will enable the tax department to track fraudulent HRA claims by some taxpayers.
Income Tax Department has been tracking fraudulent tax deductions, including fake HRA claims. | Representational image source: Shutterstock
If you are paying rent to your spouse, parents, or any other family members for claiming the House Rent Allowance (HRA) benefit under the Old Tax Regime, there is an important new disclosure proposed for you in the draft Income-tax rules 2026.
The draft rules make it mandatory to disclose the relationship with the landlord for claiming the HRA benefit.
In the list of evidence or particulars required for claiming HRA, Rule 205 of the draft Income-tax Rules 2026 makes the following mandatory if you are paying over ₹1 lakh per year as rent.
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Name of landlord/landlords
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Address of the landlord/landlords
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Permanent Account Number (PAN) of the landlord/landlords
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Relationship with the landlord
Is this a new disclosure?
Yes. Under the existing Income-tax Rules 1962, you are not required to disclose your relationship with your landlord.
As per Rule 26(C) of the Income-tax Rules 1962, the evidence or particulars required for claiming HRA benefit are the following:
"Name, address and permanent account number of the landlord/landlords where the aggregate rent paid during the previous year exceeds rupees one lakh."
What impact could the proposed rule have on you?
I believe that the mandatory disclosure of tenants' relationships with their landlords will enable the tax department to track fraudulent HRA claims by some taxpayers.
It will also allow the tax department to have an eye on the flow of money from one relative to another in the garb of rent.
Transactions in which large amounts are paid as rent to the spouse or parents, but the recipients do not report such income in their Income-tax returns (ITR), may trigger tax notices in the future if draft rules are implemented.
Over the last few years, the Income Tax Department has been tracking fraudulent tax deductions, including fake HRA claims, by many taxpayers. In fact, in 2025, the department uncovered organised rackets operated by certain ITR preparers and intermediaries who were filing returns claiming fictitious deductions and exemptions, including the HRA benefit.
"Analysis reveals misuse of deductions under sections 10(13A), 80GGC, 80E, 80D, 80EE, 80EEB, 80G, 80GGA, and 80DDB. Exemptions have been claimed without valid justification," it added. Of these, Section 10 13(A) of the Income-tax Act 1961 provides for the HRA benefit.
However, if you are genuinely paying rent to your spouse or parents and maintaining proper records, there should not be any reason to worry if you are required to disclose your relationship for the HRA benefit. However, to avoid any trouble in the future, the recipient of the rent, be it your spouse or parents, should also disclose such rent in their ITRs.
Please note that the draft rules are not final yet. They are expected to be implemented after final approval with effect from April 1, 2026. Till then, the rules may undergo some changes. We will keep you updated.
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