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HRA under taxman's scanner

There is bad news for those who forge rent receipts to get tax exemption on housing rent allowance (HRA).
Print Edition: December 2013
I-T filing alert: HRA under taxman's scanner

There is bad news for those who forge rent receipts to get tax exemption on housing rent allowance (HRA). The Central Board of Direct Taxes (CBDT) has made it mandatory to declare the landlord's PAN details if the annual rent exceeds Rs 1 lakh or Rs 8,333 per month.

The limit was Rs 15,000 per month earlier. If the landlord does not have a PAN, the taxpayer will have to submit a declaration to this effect from the landlord, along with the name and address of the landlord.

The new rule is applicable for 2013-14 as well. Also, at present, those who get HRA of up to Rs 3,000 per month are not required to produce rent receipts.

However, the circular says, "This concession is only for the purpose of tax deduction at source... the Assessing Officer is free to make such enquiry for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent."

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