If you have also done House Rent Allowance (HRA). So this news is useful for you. For your information, let us tell you that it is important to keep some things in mind while making HRA claim. If even one mistake is made, income tax notice may come. Let us know in detail in the news below…
Do you claim House Rent Allowance (HRA)? Any employee can take advantage of this deduction. The benefit of this deduction is available under Section 10 (13A) of the Income Tax Act, 1961. Due to this deduction your tax liability is reduced. The benefit of this deduction should be availed at least by those people whose tax liability is very high. If you live in a rented house in big cities, then this deduction can prove to be very beneficial for you.
The reason for this is that house rents are higher in big cities. Experts say that claiming HRA deduction is also good for a person’s credit score, as it is considered a sign of financial stability. It is important to keep some things in mind while claiming HRA deduction, because if the deduction is not claimed as per the rules, you may get a notice from the Income Tax Department.
Notice may come if these things are not taken care of
Many times a person claims HRA deduction in excess of the prescribed limit. Some people do not submit the required documents to claim HRA deduction. In some cases, it has been seen that despite not living in a rented house, the person claims HRA deduction and submits fake documents. In these situations, the Income Tax Department can send notices to the taxpayers. The department can also investigate HRA claims. If the Income Tax Department finds that fake documents have been used to claim this deduction, then it can also impose penalty.
These documents are necessary to claim HRA
SAG Infotech MD Amit Gupta said that if you get a notice from the Income Tax Department related to HRA deduction, then you will have to respond to it properly. Gupta says that it is important to know the conditions for claiming HRA. First of all, it is necessary to have a rent agreement for the house in which you live. This is the most important document to claim HRA deduction. The means of paying fare should also be transparent. You can use online mode or check to pay the rent.
Landlord’s PAN details are necessary
Gupta said that if the annual rent of your house is more than Rs 1 lakh then it is important for you to get the PAN details of your landlord. It is also important to check that the correct details of PAN should be written on the rent receipt. If your landlord does not have a PAN, you will have to take a declaration along with Form 60. If you take rent receipt from a close relative, it is important that both the parties give complete information about it in their tax returns. The information given in the rent receipt should match with your ITR return.
