HRA Rules Changed: If you live in a rented house and avail the benefit of House Rent Allowance (HRA), then there is very important news for you. Some changes have been made in the rules for claiming HRA. Now you will have to provide some additional information in the new ITR-1 and ITR-4 forms (Income Tax Return Form).
Many people have a question in their mind whether it is necessary to provide the PAN card of the landlord. Let us understand this change in detail so that you can avail HRA without any hassle and take full advantage of tax savings.
When is it mandatory to provide PAN of the landlord?
In some cases, it is mandatory to provide the landlord’s PAN card. This rule is directly related to your HRA exemption:
- If your monthly rent is less than ₹8,333, there is no need to provide the landlord’s PAN number. Monthly rent between ₹8,333 and ₹50,000 (between ₹1 lakh and ₹6 lakh per annum): In this case, you will have to provide the landlord’s PAN number.
- If your monthly rent is more than ₹50,000, then apart from providing the landlord’s PAN number, you will also have to deduct TDS (tax deduction at source) on the rent. It will be your responsibility to deduct this TDS and deposit it with the government.
- If the landlord does not have a PAN card, you will have to write an affidavit
- If you pay rent of more than ₹1 lakh annually (i.e. more than ₹8,333 per month), you are required to provide the PAN number of the landlord.
- If you do not do this, you will not get the benefit of HRA.
- If you provide a wrong PAN number, you may receive a notice from the Income Tax department and your HRA benefit may be completely lost.
Earlier, there was no separate space for HRA information in the online ITR form, but due to this year’s change, this information will now have to be given specifically.
What are the changes in the new ITR form
In the new ITR Excel form, HRA claimants will have to provide the following information:
- This is the amount you have received as HRA from your employer.
- This is the total rent you have paid to the landlord throughout the year.
- Details of your basic pay and other allowances as defined under section 17(1) of the Income Tax Act.
Why is PAN card being asked for?
The main objective behind this move of the government is to keep track of rental transactions and ensure that if you are earning rental income, you are paying tax on it or not. This will help prevent tax evasion and bring transparency in the entire process.
Four important things to keep in mind while claiming HRA
There is no need to provide the landlord’s PAN number if your monthly rent is less than ₹8,333. Monthly rent between ₹8,333 and ₹50,000 (between ₹1 lakh and ₹6 lakh per annum): In this case, you will have to provide the landlord’s PAN number.
If your monthly rent is more than ₹50,000, then apart from providing the landlord’s PAN number, you will also have to deduct TDS (tax deduction at source) on the rent. It will be your responsibility to deduct this TDS and deposit it with the government.
If the landlord does not have a PAN card, then you will have to give an affidavit with his name and address. But, if he has a PAN and he is not giving the PAN then you will not get the benefit of HRA.
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