The new rule is aimed at people claiming HRA
exemption for living in their own house.
If you are a salaried
taxpayer claiming HRA (house rent allowance) deduction, watch out. The central
government has lowered the exemption limit for reporting the rent received.
Salaried taxpayers claiming HRA exemption and paying a
rent of over Rs. 1 lakh per year have to give landlord's PAN (permanent account
number).
Till now, if the
total rent paid was less than Rs. 15,000 a month there was no need to submit
the landlord's PAN details.
The new rule effectively lowers the rent limit from Rs.
15,000 a month to Rs 8,333 per month for claiming HRA exemption without making
any disclosures.
"Further, if
annual rent paid by the employee exceeds Rs. 1,00,000 per annum, it is
mandatory for the employee to report PAN of the landlord to the employer,"
the Central Board of Direct Taxes (CBDT) said in its latest circular.
"In case the
landlord does not have a PAN, a declaration to this effect from the landlord
along with the name & address of the landlord should be filed by the
employee," it said.
Though incurring
actual expenditure on payment of rent is a pre-requisite for claiming deduction
under section 10 (13A) of the I - Tax Act, it has been decided as an
administrative measure that salaried employees drawing HRA up to Rs. 3,000 per
month will be exempted from production of rent receipt.
The new rule is aimed at people claiming HRA exemption
for living in their own house.
"It has to be
noted that 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" CBDT said
in its circular.
Thus, HRA granted to an employee who is residing in a
house / or 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," CBDT said.
Src: TNN
No comments:
Post a Comment