NEW DELHI: House Rent Allowance or HRA is crucial part of a salary break-up. You can declare deduction on HRA when computing your tax liability or when filing source of revenue tax returns. You may also declare HRA for tax purposes even though you are dwelling with your folks, however paying hire to them even though your employer does not give you HRA. If you are planning to say HRA exemption to avoid wasting tax, observe the checklist given below to avoid a rejection.
Rent Agreement: It is important to post hire settlement for your employer when computing your tax liability. Rent settlement should mention the parties concerned, hire amount, entire cope with of position you are residing in and period of time of the settlement. If you are paying application or maintenance bills, you should ask your landlord to incorporate that in the hire settlement.
Ask Your Landlord For His PAN If You Pay Rent Over Rs 1 Lakh Per Annum: Your employer will ask you to post your landlord’s PAN if you're paying hire over Rs 1 lakh in keeping with annum. So, you should test previously if your landlord is willing to percentage his PAN with you for tax purposes. If the PAN of your lardlord is not to be had, you'll have to download Form 60 duly stuffed in from your landlord. This will permit you to avail HRA deduction even though lardlord’s PAN is unavailable.
Rental Agreement With Parents: If you are staying with your folks and paying a hire, then you wish to have to verify an settlement between landlord (your folks) and tenant (you) is completed. Also, your folks should show the hire as apartment source of revenue beneath ‘source of revenue from different sources’ in their source of revenue tax returns. However, hire paid to partner does not qualify for HRA deduction as you each are supposed to keep and reside in combination.
When Rent Exceeds Over Rs 50,000 monthly: When you are paying hire greater than Rs 50,000 for your landlord, you wish to have to take a few steps beneath the Income Tax Act. You should deduct TDS @ five in keeping with cent at the hire paid for your landlord when it exceeds over Rs 50,000 monthly. Otherwise, interest of 1 in keeping with cent shall be levied on you in case you fail to deduct TDS.
Rental Agreement Must Have The Sharing Ratio If The Accommodation Is Shared: In metro cities, buddies and co-workers come in combination to percentage a flat or an accommodation and divide the hire among themselves. In the sort of case, apartment settlement should have the sharing ratio for hire, application and upkeep bills obviously discussed to say HRA deduction.
Make Electronic Transfer: It’s at all times important to make digital switch rather than money payment for hire. This will permit you to to have concrete proof to say HRA deductions for tax get advantages. Besides, if you're making some excess hire payment in money over and above the amount discussed in apartment settlement, you'll receive HRA deductions at the amount listed in the settlement only. So, be careful to get everything documented on the subject of hire.
Furnish Form 10 B If You Wish To Claim HRA But Employer Is Not Providing It Or If You Are Self-Employed: There’s hope for salaried people who do not get HRA or who are self-employed and want to declare tax get advantages for apartment payment. Under section 80 (GG) of the Income Tax Act, such other people can declare get advantages by way of furnishing form 10B.
Rent Receipts: Furnishing a hire receipt to the employer is necessary especially if the hire paid monthly exceeds Rs. three,000. You must thus ask for a receipt for the hire paid each and every month.
Keep these important tips in thoughts and declare HRA for tax deduction hassle loose.
Rent Agreement: It is important to post hire settlement for your employer when computing your tax liability. Rent settlement should mention the parties concerned, hire amount, entire cope with of position you are residing in and period of time of the settlement. If you are paying application or maintenance bills, you should ask your landlord to incorporate that in the hire settlement.
Ask Your Landlord For His PAN If You Pay Rent Over Rs 1 Lakh Per Annum: Your employer will ask you to post your landlord’s PAN if you're paying hire over Rs 1 lakh in keeping with annum. So, you should test previously if your landlord is willing to percentage his PAN with you for tax purposes. If the PAN of your lardlord is not to be had, you'll have to download Form 60 duly stuffed in from your landlord. This will permit you to avail HRA deduction even though lardlord’s PAN is unavailable.
Rental Agreement With Parents: If you are staying with your folks and paying a hire, then you wish to have to verify an settlement between landlord (your folks) and tenant (you) is completed. Also, your folks should show the hire as apartment source of revenue beneath ‘source of revenue from different sources’ in their source of revenue tax returns. However, hire paid to partner does not qualify for HRA deduction as you each are supposed to keep and reside in combination.
When Rent Exceeds Over Rs 50,000 monthly: When you are paying hire greater than Rs 50,000 for your landlord, you wish to have to take a few steps beneath the Income Tax Act. You should deduct TDS @ five in keeping with cent at the hire paid for your landlord when it exceeds over Rs 50,000 monthly. Otherwise, interest of 1 in keeping with cent shall be levied on you in case you fail to deduct TDS.
Rental Agreement Must Have The Sharing Ratio If The Accommodation Is Shared: In metro cities, buddies and co-workers come in combination to percentage a flat or an accommodation and divide the hire among themselves. In the sort of case, apartment settlement should have the sharing ratio for hire, application and upkeep bills obviously discussed to say HRA deduction.
Make Electronic Transfer: It’s at all times important to make digital switch rather than money payment for hire. This will permit you to to have concrete proof to say HRA deductions for tax get advantages. Besides, if you're making some excess hire payment in money over and above the amount discussed in apartment settlement, you'll receive HRA deductions at the amount listed in the settlement only. So, be careful to get everything documented on the subject of hire.
Furnish Form 10 B If You Wish To Claim HRA But Employer Is Not Providing It Or If You Are Self-Employed: There’s hope for salaried people who do not get HRA or who are self-employed and want to declare tax get advantages for apartment payment. Under section 80 (GG) of the Income Tax Act, such other people can declare get advantages by way of furnishing form 10B.
Rent Receipts: Furnishing a hire receipt to the employer is necessary especially if the hire paid monthly exceeds Rs. three,000. You must thus ask for a receipt for the hire paid each and every month.
Keep these important tips in thoughts and declare HRA for tax deduction hassle loose.
Claiming HRA? A checklist to follow
![Claiming HRA? A checklist to follow]()
Reviewed by Kailash
on
March 19, 2018
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