New Delhi, Feb. 23 -- The new Income Tax rules have proposed a change for claiming house rent allowance (HRA) that may affect claims where the rent is paid to parents, siblings or any other relative. Effective 1 April, salaried employees may have to clearly state their relationship with their landlord while claiming HRA tax benefits.

The aim is to prevent misuse of the exemption, especially in cases where rent is shown to be paid to family members to reduce tax liability, said Sandeepp Jhunjhunwala, partner at Nangia Global Advisors. If implemented, the rule could lead to stricter checks of HRA claims by tax authorities.

HRA can be claimed by salaried individuals who pay rent for the house they live in. In cases where a person lives in ...