We have noted that most of the time employees provide incomplete rent receipts and multiple receipts, which unnecessarily waste pages and time in record-keeping. To overcome this, I have designed a single-page house rent receipt that covers everything in compliance with Income Tax. Employers should circulate this to their employees for proper record-keeping.
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Legal Compliance of Rent Receipts
Such formats may be useful for HR practice, but for legal compliance and disputes between the landlord and tenant, such rent bills will be void under court. A rent receipt is a commercial voucher for the bona fide existence of the tenant at the specified place and the legal binding of the landlord to provide all amenities.
Considerations for Tax Deducted at Source (TDS)
In normal practice, just one or two rent receipts with a similar statement are considered good. However, from the view of TDS, the auditor will not consider it good if the amount exceeds the 1 lakh slab per year. They will ask for all receipts and the agreement copy as well. Without these, the House Rent Allowance (HRA) would get clubbed to the gross taxable amount.
Electronic Receipts
Receipts may also be in electronic form but digitally signed by the landlord. As the payment is made monthly, the receipt would be issued monthly, not on a single sheet.
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Such formats may be useful for HR practice, but for legal compliance and disputes between the landlord and tenant, such rent bills will be void under court. A rent receipt is a commercial voucher for the bona fide existence of the tenant at the specified place and the legal binding of the landlord to provide all amenities.
Considerations for Tax Deducted at Source (TDS)
In normal practice, just one or two rent receipts with a similar statement are considered good. However, from the view of TDS, the auditor will not consider it good if the amount exceeds the 1 lakh slab per year. They will ask for all receipts and the agreement copy as well. Without these, the House Rent Allowance (HRA) would get clubbed to the gross taxable amount.
Electronic Receipts
Receipts may also be in electronic form but digitally signed by the landlord. As the payment is made monthly, the receipt would be issued monthly, not on a single sheet.
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