Furnishing of declaration from land lord in case no pan

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2012 As per CBDT Notificaton if an employee paying rent per Annum is exceeding Rs. 1,80,000/he must produce Rent receipt along with PAN of Land Lord.other wise he can submit declaration from land lord.

It was noticed that Land lord is declaring he does not have PAN though his total taxable income is more than Rs. 1,80,000/- in case of senior citizen Rs. 5,00,000/-

Please advice whether Employer has to verify the genuineness of the claim and allow the HRA exemption which is exceeding Rs. 1,80,000/-
Whether DDO has to satisfy the claim or not. Merely because obtaining declaration from land lord which is false can DDO satisfy.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

02 February 2012 DDO has to verify the genuineness of the claim. you may collect the proof for not land lord exemption. and justify the same.

Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2012 Land lord's annual rental income is taxable however land lord is declaring doesn't have PAN and doesn't have taxable Income. Can the DDO disallow the claim of HRA.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

25 July 2024 In the scenario you've described, where the landlord declares that they do not have a PAN card despite having taxable income exceeding the threshold for mandatory PAN declaration, the responsibility falls on the employer (Designated Deductor Officer - DDO) to verify the genuineness of the declaration provided by the employee regarding the landlord's PAN status.

Here are the steps and considerations:

1. **Verification of Landlord's PAN Status:**
- The employer (DDO) should make reasonable efforts to verify the landlord's PAN status. This can be done by requesting the employee to provide additional supporting documents or by contacting the landlord directly to verify their PAN status.
- If the landlord's total taxable income exceeds the threshold requiring PAN, it is unusual for them to declare otherwise. The DDO may need to exercise due diligence to ascertain the truthfulness of the declaration.

2. **Declaration from Landlord:**
- If the landlord insists they do not have a PAN, the employee can provide a declaration to this effect. The declaration should ideally be accompanied by other relevant documents (such as proof of rental payments, correspondence with the landlord, etc.) to substantiate the claim.

3. **DDO's Decision on HRA Exemption:**
- The DDO has the discretion and responsibility to determine whether to accept the declaration from the landlord and allow the HRA exemption.
- If the DDO suspects that the declaration provided by the landlord is false or misleading, they may request additional proof or clarification from the employee.

4. **Risk of Disallowance:**
- If the DDO has reason to believe that the declaration is false or if they are unable to verify the landlord's PAN status satisfactorily, they may choose to disallow the HRA exemption exceeding Rs. 1,80,000.
- Disallowance of the HRA exemption would mean that the excess amount over Rs. 1,80,000 would be added back to the employee's taxable income.

5. **Documentation and Compliance:**
- It's crucial for both the employee and the DDO to maintain proper documentation of the declaration and any communications with the landlord regarding the PAN status.
- Employers should follow the guidelines provided by the CBDT notification and ensure compliance with tax regulations while considering the validity of the landlord's declaration.

In summary, while the employer is required to obtain a declaration from the landlord in case of non-availability of PAN, they also have the responsibility to verify the authenticity of such declarations. If there are doubts about the declaration's validity, the DDO may take steps to gather more information or documentation before deciding on the allowance of HRA exemption exceeding Rs. 1,80,000.

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