Hi All,
Good Evening.
I need some information and would request the experts to help me with it. Can an organization penalize a couple for claiming HRA exemption to the extent that they are terminated. Isnt it the IT law who is to decide on the action?
Request for your help.

From India, Hyderabad
Thanks Mr Arora. Here the issue was that the couple was unaware of the law and both have submitted for HRA exemption. They didnt share and it was total rent for each individual. They did it last year as well, however, this year the company asked them to leave stating that the documents are forged. So, i wanted to know can an HR take such a step for documents related to IT dept.
From India, Hyderabad
If a company becomes aware that an employee is attempting to evade income tax by submitting forged documents, I think it is legally obliged to inform the relevant tax authorities. Tax evasion is a crime and should be reported.
From India, Mangaluru
I have few questions
Is there any person who can accept/admit that he/she has never submit forged documents (HRA receipts) or anything like and not going to do the same in future for sure?
Is there any person/employer can admit/accept that he/she has never accept ed forged documents (HRA receipts) or not going to do the same in future too?
Please thing about it once.
Yes I agree with “FreeBirdConsultant “ that Tax invasion is a crime and should be reported but how many of you have reported or have raise voiced to stop this.

From India, Gurgaon
I agree with Mr. Arora, and in my view all persons working in any organisation does not share equal knowledge for taxation, its the duty of the Accounts in Charge or the Finance Head who must have guided the couple for any forged documents as soon as they received the investment declaration form or analyize the forged documents. Its the employer duty to deduct TDS from the salary so if any forged documents are submitted by the couple the same can be avoided at the time of deduction. Even I am of the opinion that no one comes with experience in all fields and since this subject is not relevant to the couple they must have done forgery by mistake or unknowingly so take the issue and should be given a warning or any punishment not to the extent of terminating.
Thanks & Regards

From India, Ahmadabad
I totally agree with Saji. I feel its the responsibility of the HR and Finance to guide the employees. Moreover the mistake was made unknowingly and the same documents were accepted the previous year. So, the question arises as to why the previous year document were considered. They planing for a legal action and would appreciate your inputs to the same.
From India, Hyderabad
Employer can lose the legal bettle. Irrespective of whether mistake was made unknowingly or knowingly, termination of service was totally unjustified. The employer does not enjoy any authority to take any penal action on behalf of the Income Tax Authorities. At the most the employer could have reported the matter to the IT authorities for reassessment of the income tax. Only the Assessing Officer was authorised to impose any penalty, as prescribed in law for less deposit of tax or submission of false return by the employees.
From India, Delhi
How can they go for legal since the couple has not done any harm to the company has such, with regards to the forged documents when the company came to know that it was a forged documents they would have considered it null and void and have deducted the tax without considering the HRA exemption. If the company has already filed a legal suit let the employee also file a cross legal suit against the employer, they can also approach the labour court for help. The couple does not need to worry at all since even the legal will not help the employer. As said by Mr. Dhingra the couple can file a revised return and that will sort out their worries.
Thanks & Regards

From India, Ahmadabad
Oh my god such a big issue for a meagre HRA receipt i being in accounts have seen so many cases where the employee submits fake rent receipts, for HRA exemption and even employer accepts it even employer sometimes encourages employees to give fake rent receipts.

Based on the declaration of the employee the disbursing officer has to deduct TDS accordingly, also if the monthly HRA is less than 3000 then the DDO has option of not collecting rent receipt and just giving HRA exemption based on declaration, rent receipt is not mandatory if HRA earned per month is less than 3000. Even if you report this to IT authorities the company / employer will face more stringent action as inspite of knowing they are couple he accepted their claims for HRA exemption, might be in terms of Tax planning the husband wife forgot to tell each other , might be according to them they did not know the other is also going to claim HRA exemption? Maximum that couple will need to pay some fine with interest that s all.

From India, Madras
Dear Members,
Please read carefully!!
Fake rent receipt could cost you your job: HC - News18

From India, Mumbai

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