Sage-Tips

Do we need to show proof for HRA?

Yes, the rent receipt is a mandatory document to claim HRA. If an employee receives HRA in excess of Rs. 3000/month, it is necessary to present rent receipts to the employer for claiming HRA.

How can I display my rent receipt for income tax?

There is no set format for rent receipts prescribed. If paying rent more than Rs. 5000 in cash then ensure the revenue receipt is affixed with the revenue stamp. If the annual payment of rent exceeds 100000, then you need to report the PAN No of your landlord.

Can HRA be claimed if not mentioned in Form 16?

If HRA is not mentioned in Form 16, that means your employer has not provided a separate component of HRA. HRA u/s 10(13A) can be claimed when the employer gives a separate component towards HRA. In the absence of it, you can claim for rent paid under Section 80GG.

What happens if I claim fake HRA on my tax return?

In case, you had claimed fake HRA, then avoid trouble at the time of filing your income tax return.So, when you are filing your Income Tax Return pay the tax that you had saved under the curtain of fake rent receipt. Click here to know how much HRA tax exemption you claim.

Is it a thing of the past to submit fake rent receipts?

Submitting fake house rent receipts to claim HRA benefits and lower one’s tax burden may soon be a thing of the past. For, being perturbed by the rising incidence of fake HRA claims as well as guided by a recent tribunal ruling, the Income Tax Department is likely to tighten the screws on those submitting fake rent receipts.

What are the benefits of HRA exemption for employees?

It is beneficial for the employee as it lowers the tax which he/she pays on accommodation per year. If you claim for HRA exemption then you need to submit some legal documents like a receipt or an agreement and ID proof of landlord. You can also claim for HRA exemption on your income tax by filling 12BB Form

Can I claim HRA for a house owned by a relative?

Some taxpayers who are actually staying in a house owned by themselves or any of their close relatives claim the HRA benefit by showing dummy rent payment (without actually paying any rent) to their relatives. Generally these relatives fall in lower/ Nil tax bracket as compared to the taxpayer.