Is it mandatory to show rent agreement for HRA exemption?
Is rent receipt mandatory for claiming 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.
Is rent agreement mandatory in India?
It is required to register a rent agreement if the rental period is more than 11 months. In some states including Maharashtra, Telangana, and Andhra Pradesh, among others, it is compulsory to register the rent agreement irrespective of the rental period.
What is the HRA exemption limit?
An Illustration
| Condition | Tax Exemption |
|---|---|
| 1 | Rs 60, 000 (@Rs 5000 Per Month, according to the HRA exemption 2016-17 rules, earlier the limit was Rs 2, 000) |
| 2 | Rent paid i.e. 1.5 Lakhs – 10\% of the total annual income, i.e. Rs 40, 000= Rs 1, 10, 000 |
| 3 | 25\% of the total income= Rs 1 Lakh |
Is rent agreement mandatory for HRA exemption?
No. Rent agreement is not mandatory for HRA exemption but it is better to have one as your CA can demand it for lower TDS. Is rent receipt mandatory for HRA exemption?
Can I claim HRA tax exemption on fake rent receipts?
Some people do create fake rent receipts and try to claim HRA tax exemption. Fake rent receipts can be caught by an Income tax officer and you may have to pay penalties along with due income tax. HRA rent paid proof is not required but can be requested by income tax officer if they have a suspicion about your rent receipts.
What is House Rent Allowance (HRA)?
House Rent Allowance (HRA) is an essential component of an individual’s salary which unlike other components are not fully taxable. Individuals who receive House Rent allowance and stays in a rented accommodation can avail tax exemption benefit u/s 10 (13A) of the Income Tax Act.
What are the HRA tax exemptions for self-employed?
The self-employed can also claim for deductions and HRA tax exemptions, towards the House Rent Allowance (HRA). They can claim the benefits under the Section 80 GG. This Section can also be used to claim the HRA tax exemptions by the salaried employees when they do not receive any HRA. HRA Tax Exemption for the Salaried Individuals