New Rule of Claiming Tax Exemption on your HRA

Get landlords PAN details on plain paper for HRA claim

The Income Tax Department has made mandatory for all the Salaried Taxpayers, who claims Income Tax exemption on House Rent Allowance under section 10(13A), exceeding Rs.1 lakh per annum (Rs.8,333 per month) to obtain PAN card number of their landlord and submit it to their employer. Earlier the limit was Rs.1.80 lakh per annum (Rs.15,000 per month) but now it has been reduced to Rs.1 lakh per annum.

What does the new circular mean?

According to a circular of CBDT vide its Circular No. 08/2013 F.No. 275/192/2013-IT(B) dated 10.10.2013, annual rent where furnishing PAN of the landlord by employer was necessary for claiming exemption under HRA is reduced from Rs.1.80 Lakh per annum to Rs.1 lakh per annum.

What is the HRA exemption?

Under section 10(13A) of the Income-tax Act, every salaried individual receiving HRA from his employer, becomes eligible for tax exemption under this section. He is required to produce rent receipts in order to claim tax exemption, however salaried employees who get house rent allowance up to Rs.3,000 per month don’t have to produce rent receipts.

Refer: Calculation of HRA exemption under section 10(13A)

Remember, the assessing officer can ask for a receipt, if required, as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent.

Get landlords PAN details on plain paper for HRA claim

Circular No. 08/2013 F.No. 275/192/2013-IT(B) dated 10.10.2013 does not state that the document has to be a ‘sworn affidavit’ or a ‘notarised document’. Hence, an individual should obtain the information from his or her landlord on a simple plain A-4 size paper.

What should you do if your landlord doesn’t have PAN?

According to the CBDT circular, in case the landlord does not possess a PAN, a declaration is to be given by the the landlord along with the name and address to the employee which should be submitted by employee to his employer in the format given below.

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