If you are a salaried taxpayer claiming HRA (house rent allowance)
deduction, the central government has lowered the exemption limit for
reporting the rent received.Salaried taxpayers claiming HRA exemption
and paying a rent of over Rs 1 lakh per year have to give landlords PAN
(permanent account number). Till now,if
the total rent paid was less than Rs 15,000 a month there was no need
to submit the landlords PAN details.The new rule effectively lowers the
rent limit from Rs 15,000 a month to Rs 8,333 per month for claiming HRA
exemption without making any disclosures.
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, the Central Board of Direct Taxes said in its latest
circular.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.
Though incurring actual
expenditure on payment of rent is a pre-requisite for claiming deduction
under section 10(13A) of the I-Tax Act, it has been decided as an
administrative measure that salaried employees drawing HRA up to Rs
3,000 per month will be exempted from production of rent receipt.
The new rule is aimed at people claiming HRA exemption for living in
their own house. 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, CBDT said in its circular.
Thus, HRA 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, CBDT said.
