Your employer needs a proof of rent payment to allow exemption on HRA. The employer is required to collect proofs from you before allowing any exemptions & deductions. This is your employer’s responsibility as per the income tax act.
Do I need a lease agreement with my landlord?
Yes, you need a lease agreement with your landlord. This agreement must have details of the accommodation on lease, period of lease and rent. This document may also have to be submitted to your employer.
Why does my company ask me to submit rent receipt proofs?
To allow you exemption on HRA, it is mandatory for the employer to collect proof of rent payment. The employer will give you exemption on HRA based on these rent receipts. Your final tax liability will be calculated accordingly. Your TDS shall be adjusted so you don’t have to pay tax on HRA.
Do I need a receipt for every month?
Usually, employers need receipts for 3 months or so.
Do I need the PAN number of my landlord?
If the annual rent paid by you is more than Rs 1,00,000, it is mandatory to obtain PAN of the landlord and report it to the employer to claim HRA exemption.
In case the landlord does not have a PAN, you can ask for a declaration to this effect from the landlord with name and address of the landlord. And keep it safely in your records.
Do I need a scanned copy of my landlord’s PAN card?
No, you don’t need to keep a scanned copy of your landlord’s PAN.
I was not able to claim HRA from my company. Can I claim it myself?
Yes, HRA exemption can be directly claimed in your income tax return. You can use this calculator to find out the exempt portion of HRA. This exempt amount has to be reduced from your total taxable salary. The net amount is shown as your ‘income from salary’ in your income tax return.
In case you claim HRA exemption directly in your tax return, you must maintain rent receipts and lease agreement safely in your records; in case the assessing officer asks for them later
I have changed jobs this year. Should I share my old rent receipts with the new company?
If your current employer is allowing you HRA exemption from previous job's income, you may be required to submit your old rent receipts. Do remember to disclose your salary from your previous employment to your current employer in Form 12B.
My landlord is refusing to give me a rent receipt. What can I do?
In case your landlord does not provide you a rent receipt you may not be able to claim HRA exemption. Do agree with your landlord regarding rent receipts before taking the accommodation on rent.
I was in a rental apartment for part of the year. Can I claim HRA?
Yes, you can claim HRA exemption for the months you were paying rent.
Is there a deadline for submitting proofs (rent receipts) to my company?
Since employers need to deduct and deposit TDS timely, they usually provide a deadline by which all tax proofs must be submitted. By submitting your rent receipts and other proofs timely, you can make sure no extra TDS is deducted on your income.
However, do not worry if you miss this deadline. You can claim HRA exemption directly in your income tax return.
Do I need hard-copy of rent receipts or is a soft copy OK?
Check with your employer about the format in which you have to submit.