New Rule By Income Tax Department for HRA exemption – Salaried Tax payers who usually claim HRA Exemption against the paying rent are comes under the IT Department scanner. New guidelines has been issued by Income Tax Department for such tax payers who are claiming exemption under House Rent Allowance (HRA).
Next time onward all such Tax payers need to report the PAN of landlords if rent in a year exceeds Rs One Lacs. In case the PAN of landlord not available, he must submit the declaration along with the complete detail and address, which need to be filled by employee.
New guidelines are circulated by Central Board of Direct Taxes in the last week of October 2013. Now the era for getting HRA exemption on fake rent receipts is over.
Existing guidelines shows that there was no need to submit PAN card of landlord if rent paid was lower than Rs 15,000 per month. Under new guidelines the Maximum exemption per month reduced to Rs 8,333.
CBDT has also provided the guidelines for such salaried employees who are not required to produce the rent receipt with the HRA up to Rs 3,000 per month. In such cases the Income Tax department has provided extra power to the Assessing Officer under section 10(13A)for enquiring the actual expenditure on payment of rent.
What would be computation of HRA in form 16 ?