My finance manager has deducted my tax because he says that the landlord's PAN is mandatory on the rent receipts. I am paying a rent of 7500 per month.
My landlord on the other hand is not ready to give me his PAN. I am in a fix now as a huge amount has been deducted from my salary.
Please help! Its quite urgent.
Thanks & Regards
Thanks a lot for your post. I am paying the rent from my pocket and I am just taking the exempltion for HRA here. Now my finance manager sayas he needs the PAN.
Is there a reference in any of the law books saying that I must provide my landlord's PAN.
This will be a great help.
If you are claiming exemption on HRA the only thing u need to produce is the rent reciept nothing else. Rent reiepts submission itself prooves you have paid the money as rent and thus are entitled for exemption.
Asking PAN no. of landlord does not make sense because it is not your organization's concern tht whether your landlord is showing the rent paid by you as income or not and is paying tax on it or not!
I am 100% sure it can be done still suppose your organization deducts the tax then make sure you submitt these rent reciepts when you file your individual return and then claim refund directly from income tax deptt. But yes second one is a lengthy process.
There is a latest notification from the IT department regarding submission of landlord's PAN if annual rent is more than Rs. 1 lakh p.a. or Rs. 8,333 per month. If landlord does not give PAN, you can ask for a declaration from him. In case neither of these is submitted to your employer, employer may not provide you the exemption. You can view similar information and questions answered on this topic from this link - Landlord PAN Mandatory for Rent Over 1 lakh P.A -InvestmentYogi
Posted In Income Tax | Articles, Featured | 7 Comments »
CA Sandeep Kanoi
If you are paying rent and getting HRA allowance every month, you are eligible for tax deductions according to the prescribed limit of HRA exemption. If you want to avail of the benefits, you must submit the rent receipts to your employer every year at the time of the collection of tax proof. Central Board of Direct Taxes (CBDT) has vide CIRCULAR NO. 8/2013, Dated: Dated: October 10, 2013 said if annual rent paid by the employee exceeds Rs 1,00,000 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.
If your house owner does not have a PAN, you need not worry, as long as he/she is ready to sign a self declaration stating he does not have a PAN. You can submit a copy of this declaration to your employer and avail of the HRA deduction.
Rent Receipt without PAN- Sample declaration format
A Format of Deceleration May be as follows :-
Name & Address
I ____________(Full name and address of the declarant) aged ____ do hereby declare that I have leased the Flat No._______________________________ From 1st April’2013 to 31st March’2014 to ___________( Name of lessor) at a monthly rent of Rs. _______/- ( __________________ only). Further I do hereby declare that my total income during the financial year 2013-2014 did not exceed the statutory limit prescribed under Income tax Act,1962 and have not assessed to tax and does not have a PAN card .
I,_________________ do hereby declare that what is stated above is true to the best of my knowledge and belief.
Verified today, the _____________ day of _________________
Date : ________________Place : ________________ (Name of The Declarant)
EXTRACT FROM THE CIRCULAR NO. 8/2013, Dated: Dated: October 10, 2013 RELATED TO HRA
Under section 10(13A) of the Act, 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 Rules, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be the least of the following:
(a) The actual amount of such allowance received by the assessee in respect of the relevant period i. e. the period during which the accommodation was occupied by the assesse during the financial year; or
(b) The actual expenditure incurred in payment of rent in excess of 1/10 of the salary due for the relevant period; or
(i) Where such accommodation is situated in Bombay, Calcutta, Delhi or Madras, 50% of the salary due to the employee for the relevant period; or
(ii) Where such accommodation is situated in any other places, 40% of the salary due to the employee for the relevant period,
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.
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 1,00,000 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.
Here's simple concised solution.
If landlord is not providing PAN, there's just two things you can do:
1. Bear brunt of non deduction of HRA;
2. Claim HRA upto Rs 1 lakh pa. For this no PAN is required. This works out as Rs 8333 pm
As in your case amount is Rs 7500 thus legally speaking he is not right in not allowing HRA. Show him above circular, provided by our group mate and avail HRA deduction.
They are in Bangalore.I have rented a house in mumbai(for myself) and i have rented a house in bangalore for my family.
As my Bangalore rent is higher, will i be able to claim HRA for Bangalore House?
I am paying 12 K in Mumbai and 21k in Bangalore.
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