Filing for AY 2024-25 is coming soon
Filing for AY 2024-25 is coming soon
Keep calm and sign up for early access to our super filing platform

Landlord’s PAN Mandatory for HRA Exemption

By Ektha Surana

|

Updated on: Dec 13th, 2023

|

4 min read

social iconssocial iconssocial iconssocial icons

Earlier, the government noticed that few employees submitted fake rent receipts to claim the HRA exemption and avoid paying taxes. Also, there are some cases where employees submit fake receipts higher than the actual rent.

If your yearly rent is above ₹1 lakh, you'll need to share your landlord's PAN with your employer. But if your landlord doesn't have a PAN, just provide a written declaration from them confirming this, along with their name and address.

So, by including the landlord’s PAN card details for HRA exemption claims where the total rent paid is more than Rs 1,00,000 per year, the government can ascertain if the employee is actually paying the rent amount mentioned in receipts. 

Also, the government has found that some landlords who rent out the properties were not paying tax or declaring the rental income in their tax returns. So, to nudge such landlords, the government has made it mandatory to include the landlord’s PAN details by tenant’s tax returns to verify the landlord’s income.

An annual rent of Rs 1,00,000 works out to Rs 8,333 per month – therefore if you are taking a house on rent and making a payment exceeding Rs 8,333 per month – remember to obtain the landlord’s PAN or you may lose out on the HRA exemption. 

In case the landlord does not have a PAN they must be willing to give you a declaration. It’s important to do this before you take the place on rent – saves you the hassle of running after your landlord for PAN at the time of tax filing.

Do note that salaried employees earning HRA up to Rs 3,000 per month are exempt from the production of rent receipts. Though – we highly recommend you to keep those for your own record. This has been laid down in the CBDT circular no. 8/2013 dated 10th October 2013 as well as in 20/2015 dated 2nd December 2015.

Click here to know all about HRA.
Click here to calculate your HRA.
Click here to claim rent deduction even if you don’t receive the HRA component.

Related Articles

  1. House Rent Allowance – Exemption Rules & Tax Deductions
  2. HRA calculator
  3. Generate rent receipts online
  4. 5 things you must know about the most common allowance – HRA

inline CTA
File your returns in just 3 minutes
100% pre-fill. No manual data entry

Frequently Asked Questions

What is an HRA allowance and how to calculate HRA?

HRA means House rent allowance in income tax. It means the component of salary received towards the rent payment is allowed as a deduction from taxable salary under section 10-13A. HRA exemption is allowed least of the below

  • Actual HRA received by the employee
  • 40% of salary for non-metro city or 50% of salary if the rented property is in Metro cities like Mumbai, Delhi, Kolkata, or Chennai)
  • Actual rent paid less than 10% of salary.

For the above calculation, the salary would include basic, dearness allowance and fixed percentage of commission.

What proofs/ documents are required for HRA exemption?

Documents like rent receipts and rental agreements will be required to be submitted to the employer to claim the HRA exemption. If the payment of rent is more than Rs 1 lakh per annum, then the PAN of the house owner will be required to be submitted. On the basis of these proofs, employers would provide a deduction for HRA in Form 16.

Can I claim HRA without landlord's PAN?

Yes, you can claim HRA without landlord PAN if your annual rent payment is less than Rs 1,00,000. However, it is mandatory to obtain your landlord's PAN when your rent exceeds Rs 1,00,000.

Can I claim HRA without a rent receipt?

Yes, if your HRA is up to Rs 3,000 per month, you can claim HRA without rent receipts. But, you can not claim HRA without rent receipts when your HRA exceeds Rs 3,000.

What to do if the landlord refuses to give the pan card?

Your employer will not allow HRA exemption if you do not submit the landlord’s PAN number or a declaration that he doesn’t have a PAN number. You can directly claim the excess tax deducted on the same while filing the income tax return for the year.

Is rent agreement mandatory for claiming HRA?

Yes, the rental agreement is mandatory for claiming HRA. However, few employers allow HRA claims without rental agreements.

When is a rent agreement required for an HRA exemption?

Rent agreement and rent receipts are required by the employer before the end of the financial year to allow the deduction for the purpose of Form 16.

When is the landlord's PAN mandatory for HRA exemption?

In case of rent payment per annum is more than Rs 1,00,000 i.e. if your monthly rent is more than Rs. 8333, the employee needs to provide landlord's PAN number to the employer mandatorily.

Who can claim HRA exemption?

This tax benefit is only available to salaried individuals who are provided HRA as a part of their salary. Also, they need to be living in rented accommodation and not their own house. 

About the Author

Multitasking between pouring myself coffees and poring over the ever-changing tax laws. Here, I've authored 100+ blogs on income tax and simplified complex income tax topics like the intimidating crypto tax rules, old vs new tax regime debate, changes in debt funds taxation, budget analysis and more. Some combinations I like- tax and content, finance & startups, technology & psychology, fitness & neuroscience. Read more

CONTENTS

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption