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HRA Exemption query

Tax queries 1271 views 5 replies

Dear All,

Please give your opinion on HRA exemption claim.

Is it necessary to produce agreement copy besides rent receipts on monthly basis to claim HRA exemption from Employer ?

Can we show rent to paid to Mother/Father or closed relative and produce rent receipts to employer to claim HRA exemption? and parent showing in their IT return, rent received from son/daughter.

Please reply.

regards,

Sandeep

 

Replies (5)

In my opinion agreement is not necessary to be produced .Stamped receipts if Rent paid exceeds Rs 5000/= is sufficient. You can  show rent paid to your parents also and get the receipts for the same

ya rent is to be paid. to whom it is paid doesn matter

Yes it can be claimed......................................

 

Production of rent receipts - Only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the house rent allowance or any portion thereof from the total income of the employee. Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance upto Rs. 3,000 per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent - Circular : No. 9/2003, dated 18-11-2003/[Para 5.2-(9)].

Expenditure must have been actually incurred - It is necessary for granting the exemption under section 10(13A) that the employee should have actually incurred the expenditure on rent. For purposes of deduction of tax, therefore, the disbursing officer should ensure that the employee concerned has in fact incurred the expenditure on rent. The payment of rent should be verified through rent receipts in the cases of all employees – Letter : F. No. 12/19/64-IT(A-I), dated 2-1-1967.


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