If you are salaried employee in a company, your payslip would have a component called HRA Allowances every month which is given by the companies to all the employees. The purpose of this component is to pay the rent for their house. Also, this is the great component to get the tax exemption if you are staying in the rented house.
In the latest circular, Income Tax dept. has announced about the compulsory submission of landlord’s PAN details if the rent amount exceeds the certain limit. This article explores the news in details. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.
Submit PAN if the total rent exceeds Rs.180000 in a year
If you are paying the rent to your landlord and getting the HRA allowances every month, you are eligible for the tax excemption as per the prescribed limit of HRA exemption. If you want to get the benefits, you must submit the rent receipts to your employer every year at the time of tax proofs collection. If you don’t have much idea on this exemption, please read about HRA exemption carefully and submit your rent receipts, it would save you lot of money from the tax payment.
Till the last year, you can submit the any amount as the rent without additional documents except the rent receipts. But, in the latest regulation, if your total rent payment exceeds Rs.180000 in a year (it means Rs.15000 per month), you have to submit the PAN card copy of the landlord.
In the case, if the landlord doesn’t own a PAN card, he must sign the self declaration saying that he don’t have the PAN card and that copy must be submitted to the employer to get the HRA exemption. This would enforce the tenants to inform the landlords to get the PAN if they don’t have.
The intention of this update is to maximize the tax collection for the government because there is millions of people not coming under the tax radar but still they are earning more money. It is good move to catch the landlords who are earning lump sum from the rental income and not paying the taxes. If you have doubts, please post it in the comments section.
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