If you are a salaried professional and live in a rented house, then HRA (House Rent Allowance) exemption can be a big tax benefit for you. Many salaried people take advantage of House Rent Allowance exemption to save their income tax.
If you also live in a rented house and want to claim HRA exemption, then it is important to understand some important things.
The government has provided this facility under section 10(13A) of the Income Tax Act, 1961, but certain conditions have to be fulfilled for this. Especially if your annual rent is more than Rs 1 lakh, then it becomes necessary to provide the PAN card number of the landlord.
If the landlord does not provide PAN, can I avail the benefit of HRA?
But what can you do if the landlord does not provide the PAN number or does not have a PAN card? If your landlord refuses to provide the PAN number, can you not avail the benefit of HRA? Many people get confused whether they will get HRA exemption or not. But there is no need to panic, because there is a solution for this too. Let us know the complete details related to HRA exemption, so that you can save tax without any hassle.
What is HRA Exemption and why is it important?Â
Every salaried employee, whose salary comes under the old tax system, gets the benefit of HRA i.e. House Rent Allowance, so that they can pay their house rent. This allowance is a part of your salary and tax exemption can be taken on it. This exemption is given under Section 10(13A) of the Income Tax Act, 1961, which saves your tax.
Note that this facility is available only to those people who live in a rented house and HRA is being given in your salary. If you live in your own house or HRA is not included in your salary, then you will not get the benefit of this exemption. However, in some special cases, rent relief can be given under section 80GG, but it has different conditions.Â
- Salary Slip: HRA should be shown separately in your salary slip. Â
- Form 16: It contains your income tax details and proves that HRA is included in your salary. Â
- Rent agreement and rent receipts: At least 3-4 rent receipts have to be submitted in a year. Â
- PAN number of the landlord: If your annual rent is more than Rs 1 lakh, then PAN number of the landlord is mandatory. Â
What to do if the landlord is not giving the PAN number? Â
Now the biggest question is what to do if the landlord refuses to give PAN? First of all, know that if your landlord is refusing to give PAN or he does not have a PAN, you can still take HRA exemption. For this you have to follow the steps given below: Â
1. Take a Declaration Letter
If the landlord does not have a PAN, then he will have to write a declaration letter. This letter should contain the landlord’s full name, address and rent details. It should clearly mention that he does not have a PAN. Submit it to the Income Tax Department.
2. Report to the Income Tax Department Â
If the landlord does not want to give the PAN despite having it, you can complain about it to the Income Tax Department. For this, you can write a letter to the Income Tax Department, in which you will have to provide complete information about the landlord, the name, address and rent details of the landlord. Income Tax officers can verify the PAN themselves after checking it.
3. Make rent payment through bank transfer
Avoid paying rent in cash as it may make it difficult to claim tax exemption. Always pay rent through bank transfer, UPI or cheque so that you have proof of the transaction. This makes verification easier for the Income Tax Department.
Thus, if your landlord is refusing to provide the PAN number or does not have a PAN card, you can claim your HRA exemption by submitting a declaration letter, paying rent through bank transfer and informing the Income Tax Department if required. Â
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