Smart & easy Software for eTDS & eTCS

Home » , , , , , , , » HRA Exemption: LandLord's Pan Mandatory if Rent Paid Over 1,00,000 Per Annum

HRA Exemption: LandLord's Pan Mandatory if Rent Paid Over 1,00,000 Per Annum

Not a good news for salaried person, who are living in rented house and claiming House rent allowance exemption under section 10 (13A )of Income Tax Act. As per CIRCULAR NO : 08/2013 F.No. 275/192/2013-IT(B) dated 10.10.2013 Income Tax department has recently has stated that  an employee who is claiming House rent exemption (HRA) and if annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer.

Earlier Pan of landlord was mandatory if rent paid  was 1,80,000 p.a wef financial year 2011-12 ,now the limit has been significantly reduced to 1,00,000 p.a only wef financial year 2013-14.


It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in Rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the House Rent Allowance or any portion thereof from the total income of the employee.

Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance upto Rs.3000/- per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax-deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent. 

Further if annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee.

How to calculate  HRA exemption amount:

According to Rule 2A of the Rules, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be the least of the following:

(a) The actual amount of such allowance received by the assessee in respect of the relevant period i. e. the period during which the accommodation was occupied by the assesse during the financial year; or

(b) The actual expenditure incurred in payment of rent in excess of 1/10 of the
salary due for the relevant period; or
(i) Where such accommodation is situated in Bombay, Calcutta, Delhi or
Madras, 50% of the salary due to the employee for the relevant period; or
(ii) Where such accommodation is situated in any other places, 40% of the
salary due to the employee for the relevant period,

For this purpose, "Salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.

To download official Notification Click Here

19 comments:

  1. Is ther any specific format for "Rent Reciept frm Landlord "?? and shud this Rent Receipt be sent alongwith the ITR Filed???
    Wht if he doesn't havePAN? Declaration format for that???
    Thanks....

    ReplyDelete
    Replies
    1. There is no specific format for the rent receipt from landlord. It can be a normal receipt stating that you have paid Rs. xxx to the landlord. For the declaration, you need to have your name, landlord name, address of property, etc. This paper needs to be submitted to your employer. I have seen more such questions on landlord pan requirement in this article - http://www.investmentyogi.com/landlord-pan-mandatory-for-rent-over-1-lakh-p-a/

      Delete
  2. Why they are targeting the salaried class , when they cannot do anything apart from the paying the actual TAX... They Should target Business people who can adjust sufficent amount towards reducing the Liability of the Tax, Moreover Till date the excemption was allowed till Rs 1. 8 L why all of the reduced to 1 L. Comman Man myself unhappy with this..

    ReplyDelete
    Replies
    1. where do you think congress get money for the upcoming elections?... salaried are the easy targets... we are individuals, and we cannot fight, so easy to loot from the weak.

      Delete
  3. Congress and it newly appointed RBI chief will go to hell,
    Why they are not targeting people having no of flats and illegal property

    ReplyDelete
  4. Surely, every Income Tax Govt Official should go to hell including RBI chief...why can't they increase income tax slabs OR curb Black Money ? Think of countries like Sweden and UAE where there is NILL tax.

    ReplyDelete
  5. What if one paying house rent 1.5L per year and owner refuse to provide PAN or Declaration form?

    ReplyDelete
  6. My ower refused to give PAN card and this lands me in soup and Congress will lose crores of voters in salaried class. THEY HAVE FORCE LAND LORD NOT POOR TENTANT WHO ARE HELPLESS IF LAND LORD REFUSES AS HE CANNT FIND ANY OTHER PLACE TO GO SUDDENLY

    ReplyDelete
  7. Landlord will surely not give PAN details...We will have to bear the brunt of the differential on us :(

    ReplyDelete
  8. Only Salaried people are bakaras

    ReplyDelete
  9. Worst congress leaders

    ReplyDelete
  10. Please can someone come up with a solution... the landlord is not willing to give his PAN card and I have to bear the income tax. my owner is earning more than 4.5lakhs p.a. from his rent account, and its all his black money. please suggest what to do

    ReplyDelete
    Replies
    1. I think, to catch these black money, the govt. decided to take care of them. But surely this is painful news to many :(

      Delete
    2. You can provide complete details of your Landlord ( Name, address etc.) on http://www.incometaxindia.gov.in/landlordetails/ rest will be taken care.

      Delete
  11. Just take the owners signature in the Rent receipts, Declare the same thing without the Pan. If tax get deducted at source, when filing the tax returns declare the amount of rent paid in the year again, also mention about the refusal to give the pan. The income tax dept should taking correct actions on this issue. If you get back the amount you will be getting it with the interest.

    Also, have a good habbit of filing all your it returns of each year.

    ReplyDelete
  12. Mr. Chidambaram, any way you are going to loose this election. At least before that, can't you favor we please? even now you are in the intention of economically harassing we aam aadmi...

    ReplyDelete
  13. Rent of the house is Rs 3000 & the person paying the rent is receiving salary under Govt sector. Further he is receiving only Rs 1000 as HRA then how can he claim deduction for the extra amount which he is paying i.e 2000.

    ReplyDelete
  14. It's really an informative and well described post. I appreciate your topic for blogging. Thanks for sharing such a useful post.

    ReplyDelete

Ca-Online

ShareThis

Recommend us on Google!

Follow us on Google

Share

Subscribe via email

Enter your email address:

Delivered by FeedBurner