*Landlord Pan mandatory for HRA exemption above 15000/- Rs* * *
According to the notification issued by the Income tax department, now
landlord PAN card is must to get tax exemption against HRA allowance. One
will have to submit PAN card as a proof if he is applying for more than
15,000 Rs. as monthly rent which means from now on, he needs to submit
original rent receipts as proof of rent as well as PAN card copy of the
landlord to get the tax exemption on HRA.
Earlier only rent receipt was required to get the tax exemption but as per
the latest notification from Income Tax Department, now one has to submit
the PAN details of the landlord. This is mainly due to the increase in the
no. of people who are producing false receipts to get the tax exemption.
In the case, if the landlord doesn’t own a PAN card, he must sign the
self-declaration saying that he doesn’t have the PAN card and that copy
must be submitted to the employer to get the HRA exemption.****
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*CIRCULAR NO. 05/2011 dated 16.08.2011 (right click to save the complete
circular in pdf)*****
Under Section 10(13A) of the Income-tax Act, 1961,any special allowance
specifically granted to an assessee by his employer to meet expenditure
incurred on payment of rent (by whatever name called) in respect of
residential accommodation occupied by the assessee is exempt from
Income-tax to the extent as may be prescribed, having regard to the area or
place in which such accommodation is situated and other relevant
considerations. According to rule 2A of the Income-tax Rules, 1962, the
quantum of exemption allowable on account of grant of special allowance to
meet expenditure on payment of rent shall be:****
** **
(a) The actual amount of such allowance received by the assessee in respect
of the relevant period; or****
** **
(b) The actual expenditure incurred in payment of rent in excess of 1/10 of
the salary due for the relevant period; or****
** **
(c) Where such accommodation is situated in **Bombay**, **Calcutta**, **
Delhi** or ****Madras****, 50% of the salary due to the employee for the
relevant period; or****
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(d) Where such accommodation is situated in any other places, 40% of the
salary due to the employee for the relevant period,****
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whichever is the least.****
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For this purpose, "Salary" includes dearness allowance, if the terms of
employment so provide, but excludes all other allowances and perquisites.***
*
** **
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.****
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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 1,80,000 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.****
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* Bigger the ambitions,
*
*greater will be the issues!!
*
****
****
*V a n a k k a m S u b b u *
****
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* *
*வாழிய செந்தமிழ்! வாழ்க நற்றமிழர்!
**வாழிய பாரதமணித் திருநாடு!*
