To claim HRA I am transferring rent money 35k to my mother's account, Can I again transfer that amount to my wife's account without making any tax liability to her.

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Transferring money between close family members does not attract any tax

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Close is ambiguous. Only concerned receivers parents, spouse and actual sibling counts.

Yes I will file an ITR for my mother with that money as Income.

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Go for tax deduction, if total income after deduction below 2.5 no tax in case of Senior citizens 5 lakh

Will it not make any legal issue like I am paying amount to my mother account as rent and again taking back that money in my wife's account.

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Your mother need to pay taxes as per her earnings

Or your wife

Someone need to pay tax for this

Benefit is only when your mother earning if zero and even after rent she comes in zero tax category

35k per months is huge i think

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Does your mother or wife have other income source...?

For women.. upto 5 lakh ke exempt from tax... Yes you can file ITR.. but won't be needing to pay tax

See all of this is tax fraud. You know it, i know it, Income tax officials know it.
Also to clarify the portion where the payment comes back to you is tax fraud. Paying hra to parents is fine..

Only if the housing property against which hra is claimed is on your mothers name and the money is not rerouted to you, it can be deemed legal. Your mother cannot give more than 50k gift to your wife without tax legally. And if she does there comes the unjustifiable question of why is this a pattern that you give her 35k and your mother gives 30k to your wife.
IT official check usually high networth individual tax returns and if you are really unlucky 0.5% of indian population then you will be caught and you will never be able to disguise it as a genuine transaction and they will impose a tax penalty.
In case of tax enquiry, officials also ask why is the money being transferred , what service is the other one providing. You can't say that she keeps gifting all her income again to you 12 months of the year. End of story.
You should just let your mother keep it for now and simply obtain it back via inheritance when she passes away. Easier if you are the only child and in case you have siblings, you should have a will made for her dividing the money so it does not become a legal battle to take your own money from your siblings

Thanks for your response buddy that's what I was thinking and was not sure about it.
But every other person is doing same for tax benefit so how they are managing it are they doing it in cash or any other way.

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