Landlord’s PAN Mandatory for HRA Exemption

Landlord's PAN is mandatory for if your rent during the financial year exceeds Rs.1 lakh. This statutory requirement is to curb fake rent receipts and ensure tax compliance. If the landlord lacks a PAN, a written declaration with their name and address is required. This rule helps verify genuine rent payments and ensures landlords report rental income in tax returns.

Key Highlights

• Landlord's PAN is mandatory if the annual rent exceeds Rs. 1 lakh.
• TDS needs to be deducted if the annual rent exceeds Rs. 6 lakhs.
• If the PAN of the landlord is not available, a declaration from the landlord is required.

When Landlord PAN is Required for ITR Filing?

The government has made it mandatory to provide the landlord’s PAN if the annual rent exceeds Rs. 1 lakh. This sums up to Rs. 8,333 per month. If the landlord does not have a PAN, a written declaration with their name and address must be submitted.

If the rent exceeds Rs. 1 lakh but within Rs. 6 lakh, landlord's PAN should be submitted. If the rent exceeds RS. 6 lakhs, you should obtain PAN of the landlord and also deduct TDS. 

This rule ensures that:

• Tenants genuinely pay rent claimed under HRA exemption.
• Landlords correctly report rental income in their tax returns.

However, Salaried employees receiving HRA up to ₹3,000 per month are exempt from producing rent receipts (CBDT Circular 8/2013 & 20/2015). Always collect your landlord’s PAN or declaration in advance to avoid losing HRA exemption during tax filing.

Who can Claim HRA Exemption?

• Salaried Employees: House Rent Allowance Exemption can be claimed only by employees receiving HRA as a part of their salary structure.
• Old Regime: HRA exemption can be claimed only by the employees opting for old regime only. This exemption is not available under the new regime.
• Rented Accommodation: The taxpayer should live in a rented accommodation. Assessees living in own house cannot claim HRA.

Documents Required for Claiming HRA Deduction

• Duly stamped rent receipts.
• Rent Agreement for the current financial year.
• If the rent exceeds Rs.1,00,000 annually, the employee should provide a copy of the landlord's PAN and submit it to their employer.

HRA Rent Receipt Format

The below is the format HRA rent receipt:

 Sample of Declaration Form

To

Name & Address 

DECLARATION

 I ____________(Full name and address of the declarant) aged ____ do hereby declare that I have leased the Flat no……………… From 1st April 2024 to 31st March 2025 to ___________( Name of lessor) at a monthly rent of Rs. _______/- ( __________________ only). Further I do hereby declare that my total income during the financial year 2024-25 do not exceed the statutory limit prescribed under Income tax Act,1961 and have not assessed to tax and does not have a PAN card.

Verification

I,_________________ do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today, the _____________ day of _________________

 Date : ________________Place : ________________ (Name of The Declarant)

You also use ClearTax to generate your rent receipts to claim HRA exemption. 

Is It Mandatory to Provide Rent Receipt to Claim HRA Exemption?

Yes, you need to submit rent receipts to your employer as proof of rent paid in order to claim HRA exemption. However, if your monthly rent is up to ₹3,000, you are not required to produce rent receipts, as per CBDT guidelines. For rent above ₹1,00,000 annually, you must also provide your landlord’s PAN or a declaration if PAN is unavailable.

Consequences of Not Disclosing Rent Receipts

If you do not submit rent receipts to your employer:

• No HRA exemption: Your employer will treat the entire House Rent Allowance as taxable and deduct higher TDS from your salary.
• Higher tax liability: Since exemption cannot be claimed, your taxable income increases, leading to more tax payable.
• Scrutiny risk: If you claim HRA directly while filing ITR without supporting documents, the Income Tax Department may question your claim during assessment.
• Loss of refund: If excess TDS is deducted due to non-submission, you will need to file ITR and wait for a refund, causing cash-flow delays.