ITR Filing: HRA i.e. House Rent Allowance is the most important part of the salary slip of employed people. To save income tax, most people claim HRA on the rent paid for their rented house.
ITR Filing: HRA i.e. House Rent Allowance is the most important part of the salary slip of employed people. To save income tax, most people claim HRA on the rent paid for their rented house. However, some people also commit fraud in this, due to which the Income Tax Department sends them a notice if anyone is suspected. It is possible that you also get such a notice, so to answer it and keep yourself safe, you must have 4 documents. Let us know which 4 documents you must have.
1- Valid Rent Agreement
If you are a tenant, then you must have a valid rent agreement. That is, you must enter into a rent agreement with your landlord. Also, you should keep in mind that the rent agreement should be under the Income Tax rules. For example, if your monthly rent is more than Rs 50,000, then it is necessary to deduct TDS from it. The rent agreement should state whether TDS will be deducted on the rent or not and how it will be deducted. Apart from this, the rent agreement should contain all the basic details of both the landlord and the tenant. Also, the PAN details of both should also be there.
2- Rent Receipt
To claim HRA, you must have a valid rent agreement as well as a rent receipt. That is, you will also have to keep the receipt of paying rent to your landlord. The rent receipt proves that you have actually paid the house rent to the landlord. While claiming HRA, you have to submit the rent receipt along with the rent agreement.
3- Online rent payment statement
Although no one asks you about the method of paying rent, but if due to any confusion you get a notice from the Income Tax Department, then you may need a bank statement. If you pay in cash, then you will not be able to provide this proof. In such a situation, many CAs and tax experts say that rent should always be paid online like UPI, net banking or credit card. This way you have a solid proof of paying rent, which no one can deny.
4- Make sure to take the landlord’s PAN
You need the landlord’s PAN while filing ITR or while claiming HRA in the company. This is how the Income Tax Department gets to know who actually received the rent you have paid. Even if you pay rent in cash, it is necessary to provide the landlord’s PAN, otherwise you will get less tax benefit. Please note that if your total rent is more than Rs 1 lakh, you must provide the landlord’s PAN, otherwise you will not be able to claim HRA on an amount more than Rs 1 lakh. Keep in mind that this PAN must be correct. The people to whom the Income Tax Department is sending notices these days had entered the wrong PAN.
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