Strict
Rule for claiming HRA Exemption
A few days back, the income tax department has tightened the norms for
claiming tax exemption for house rent allowance (HRA). HRA is the payment given
by an employer to an employee for to meet the requirement of house rent.
Now, it has become mandatory to submit the PAN (Permanent Account Number)
of the landlord to the employer if annual rent paid by employee more than Rs. 1
Lakh per annum. The central government has lowered the exemption limit for
reporting the rent. Earlier, taxpayer had to report the PAN of the landlord, if
the monthly rent more than Ra 15,000 or Rs 1.8 lakh per annum.
If the landlord does not have a PAN, the assessee has to submit a
declaration to this effect along with name and address of the landlord. Even if an employee pays rent below Rs 8,333 per month, he/she has to produce the rent receipts availing the rent receipts availing deduction under HRA. However, for thos emplyee who are drawing HRA up to Rs 3,000 per month will now be exempted from producing rent receipt. The new norm has come into effect from the financial year 2013-14 or
Assessment Year 2014-15.
The new rule is aimed at people claiming HRA exemption for living in
their own house and claim HRA exemption. HRA granted to an employee who is
residing in a house/flat owned by him is not exempt from income-tax.
For more detail and any
other query related investment, you can contact me through my email
Warm regards,
Arvind Trivedi
Certified
Financial Planner
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