If you are claiming tax exemption for house rent allowance (HRA), you will have to furnish the permanent account number (PAN) of your landlord if your annual rent paid exceeds Rs. 1 lakh, or Rs. 8,334 per month.
A circular from the Central Board of Direct Taxes (CBDT) issued for employees who are paying house rent of more than Rs. 8,334 per month and are claiming exemption from HRA are required to furnish a copy of the landlord’s PAN card.
If you are a salaried person and receive HRA from your employer, you are entitled for tax exemption under section 10(13A) of the Income-tax Act. To claim tax exemption, you are required to produce house rent receipts. The actual HRA deduction that one can avail would be the minimum of the following:
- the actual amount of HRA received or
- 50% of the salary for individuals residing in metros and 40% of the salary for individuals living in non-metros or
- the rent paid minus 10% of the salary.
Refer: HRA Calculation with Example
If the landlord doesn’t have a pan?
According to the CBDT circular, if your landlord does not have a PAN, he is required to write a declaration signed by him with his complete name and address. The landlord needs to identify himself by attaching valid identification proofs. In the declaration, the landlord has to specify that he does not hold a PAN card.
In that case you would need to submit a declaration from landlord stating that “He/She does not have PAN Number from Income Tax Department”, download the same and get it signed from your landlord.