How Upload Signed Rent Certificate to My State Return Taxact
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- Guide on Rent Receipts- How to Claim HRA Deduction
The Most Complete Guide on Rent Receipts/Slips to claim maximum HRA Tax Benefits
Equally a beginner in your career or an experienced professional, yous must have been asked by your HR & Accounts Departments for Hire Receipts. That's the time when you start making the so called jugaads with the help of your friends, relatives, colleagues or seniors to get rent receipts.
Most of the employees confront difficulties in understanding the purpose of rent receipts or how to properly utilise them for tax benefits and sometimes even make the faux receipts to avail the tax benefits. Since providing these rent receipts to accounts department or 60 minutes department has get a ritual that nosotros perform once a year, just we never bothered to go in-depth understanding of hire receipts. Whatever the state of affairs be, nosotros are addressing all your concerns in this guide to make certain y'all never face difficulties on rent receipts after reading this guide.
Why rent receipts are required?
To claim Business firm rent allowance (HRA), it is necessary to provide evidence of the payment of the hire to the employer, hire receipts works as an evidence. The employer tin provide deductions and allowances after verifying the same. The HRA assart is based on the rent receipts and will be calculated accordingly.
So, What are rent receipts exactly?
Well, this is not a weird question to ask but a relevant & of import question. 1 should have understanding of rent receipt in terms of logic and its economics. A hire receipt is a proof of transaction of rent paid by a tenant to his/her landlord. Rent receipt(document) is provided past the landlord upon receiving the rent from rentee and his signatures are placed on the it. If yous have received the rent receipt, you should go along them with the documents you care nearly. Rent receipts can exist used for legal matters( in example any) or tax benefits if you are eligible.
What are the elements of a rent receipt?
We can understand the elements of rent receipt past following statement:
"The transaction of rent happens betwixt tenant & landlord on certain date each month for a premise having an address and rent of xxx amount for the period of a month."
Then, for each hire receipt to be valid, the post-obit mandatory elements must be in to a rent receipt:
- Tenant Proper name (If you are the tenant, fill in your name)
- Landlord Proper name
- Amount of Payment
- Date of Payment
- Rental Period
- House Address (Rented Belongings)
- Signature of Landlord or Managing director
Other elements that are part of rent receipts:
- PAN of the Landlord(not mandatory, mention only if annual rent exceeds Rs.one,00,000 in a yr)
- Revenue Stamp(where corporeality exceeding Rs. 5000 is paid in greenbacks)
- Method of payment (greenbacks, credit card, coin order, cashier'southward check)
- Services or other fees included in the payment (east.g. utilities, security deposits, convenience fees)
If you are still confused on these details and would like to generate a rent receipt online: CLICK TO GENERATE Rent RECEIPTS
Some examples/formats of rent receipts being used in India:
India being a vast country having multiple languages, methods to document transactions, and different formats used past receipt books publishers, we accept many formats/designs available in marketplace. Professionals/Employees often gets confused due to these different formats available.
We are presenting you some of the formats nosotros take found in Republic of india to help you understand that they are all same & serve the same purpose
Hire slip format:
For the convenience of our users, we are providing a facility to customise and download complimentary printable rent receipts(valid format) from our rent receipt generator tool.
CLICK TO GENERATE RENT RECEIPTS
Now comes the question , what is the bodily do good of Rent Receipts ?
Many companies provide House Hire Assart(HRA) to employees for meeting the cost of living in a rented adaptation. HRA is one of the biggest tax saving avenue equally the complete amount of HRA is not taxable.
The least of the iii amounts is tax exempt -
- Actual HRA received
- Rent paid less 10% of Salary
- 40% of Bacon (50% of Bacon in Mumbai, Delhi, Chennai and Kolkata)
In order to give yous the do good of HRA, the HR section needs to verify whether yous have actually paid hire for allowing HRA revenue enhancement exemption.
Hire receipts act every bit a proof that you have really paid the amount and not showing any fake expenses to save tax.
Is rent receipt mandatory for claiming HRA?
- If employee receives HRA in excess of Rs. 3000/- per month, it is mandatory to provide Hire receipt to employer equally an evidence for challenge HRA.
- Even if your HRA is less than Rs. 3000/-, effort to go along rent receipts with yous in case Income Tax Officer asks for them at a afterward appointment.
I am sure you would agree with me when I say the landlords do not give the rent receipts even later paying the rent. So, what do we do in this situation ?
Uncomplicated just give the filled rent receipts to your landlord and ask him to sign them to admit the receipt of rent.
Where to get the rent receipts from to be submitted to the HR department?
There is no set format for the rent receipts for challenge the HRA exemption. Hither's the hack for getting one for yourself-
- Search the web and choose the one you like from the options available. Like https://tax2win.in/taxation-tools/hire-receipt
- Buy a rent receipt booklet from the stationery
Why I am required to submit rent receipts to the HR Department?
Equally per the Income Tax police of our country every person who pays salary is required to deduct revenue enhancement at source(TDS) , deposit with the regime and then pay remaining amount to the employee. During this process if any employee makes a tax saving expenditure and so the person responsible for deducting tax, has to consider and give do good of that expenditure and then deduct the tax on the net amount.
Practically, it has been observed that people submit faux rent receipts, even when they are non living in a rented adaptation. And so, to counter this, HR departments accept started asking for rent agreements for giving HRA benefits.
Looking at the importance of rent agreements, here are v things to bank check in your rent understanding
Smart tactics to be followed at the time of drafting rent agreements-
- Rent understanding should exist on Rs. 500 stamp or as per the postage rate prevailing in your state .
- It can be entered into for 11 months merely.
- For more than than 12 months, the hire agreement is not entered into instead lease human activity is to be preferred which needs registration.
- Every year, the rent agreement is renewed after eleven months with the increased hire.
- Both landlord and tenant are required to serve the notice catamenia as stated in agreement.
Important things to notation about the rent receipts:
- A acquirement stamp is required to exist affixed on rent receipts if cash payment is more than Rs. 5000 per receipt. If rent is paid through cheque and then revenue stamp is not required.
- The rent receipts for all the months for which you are claiming HRA is required to be submitted.
- If the annual hire paid exceeds Rs.1,00,000/- it is mandatory to report PAN of the landlord to merits HRA exemption.If landlord refuses to give his PAN, and so you cannot merits HRA for the hire paid in excess of Rs. ane,00,000/- and your employer will deduct the TDS accordingly.
Start of all my friends do not ask for the re-create of the PAN Card, all you need is the PAN No. In Instance, your landlord does not take a PAN bill of fare then take a declaration from him for the aforementioned and submit to your Hour.
Prevention is ameliorate than cure, when taking a house on rent talk to your landlord in advance for sharing his PAN no.
Is it right to submit fake rent receipts at my part to claim HRA? Submitting a imitation rent receipt can put you lot in trouble with Tax Department. Know more
How payment of rent helps y'all in saving taxes?
There can exist 3 situations, when you are paying rent for the rented accommodation -
- I.When HRA is a function of your CTC & you submit the proof of rent payment to your Hour
- Ii.When HRA is a function of your CTC & you forget to submit the proof of rent payment to your HR
- iii.When HRA is non a part of your CTC
Notes : Status A : Calculation of exempted HRA (Rent Paid - 1,eighty,000/-) :-
- A. Actual HRA received - 2,50,000/-
- B. Hire Paid- 10% of Basic +DA= {180000- (700000*10%)}=110000/-
- C. 50% of Basic + DA ( 700000*50%)= 350000/=
A, B,C whichever is lower is to be selected as exempted HRA.
Condition B : You can still claim the taxation benefit of HRA at the time of filing of return as HRA is a part of your CTC.The just notional loss you will have to comport is more than amount of TDS will be deducted during the year.
Condition C : If HRA is not a part of your CTC , don't be disheartened. You tin nevertheless claim the deduction of rent paid at the time of filing return u/due south 80GG but upto Rs. 60,000 only.
What if I forgot to submit rent receipts at the fourth dimension of declaration?
Fifty-fifty if you forgot to submit hire receipts, you lot tin still claim HRA while filing IT render. All you demand is Rent receipts simply.
How to claim HRA exemption at the time of filing the ITR?
Here is a stride-by stride process for claiming HRA exemption-
- Footstep i: Calculate the HRA exemption amount every bit discussed above. To avoid hassle you tin also use our HRA exemption calculator to find out the amount of exempt HRA at https://tax2win.in/tax-tools/hra-computer
- Step2 : Deduct the amount of exempt HRA from the Income Chargeable under the caput salary [column 6 of your Form 16, Part B].
- Step3: Enter the amount calculated in Footstep 2 under Income From Salary /Alimony. For instance your Gross Bacon from Form 16 is 8,00,000 and you have HRA exemption of Rs. 1,20,000, And so instead of showing Salary income Rs. 8,00,000/- in ITR1 make full information technology as 6,80,000/-.
Who can merits HRA exemption ?
If you satisfy these conditions, yous can claim HRA tax exemption:
- 1. You are a salaried employee.
- ii. You receive HRA equally a part of your salary package/CTC.
- 3. You live in a rented accommodation.
How HRA is exempt for income tax?
Although HRA is a part of the salary, but unlike basic salary it is not fully taxable. A role of HRA gets exempted under Section 10 (13A) of the Income-taxation Act, subjected to sure conditions. The amount of exempted HRA is deductible from the total income before arriving at a taxable income.
Can I pay rent to my parents and claim HRA?
Yeah, you can claim HRA taxation exemption past paying rent to your parents. It is advisable to have a rent understanding. You would need rent receipts to claim HRA exemption. Also, your parents need to show rental income from you in their income tax return.
Can I claim HRA and abode loan?
Yeah, certainly. Y'all can claim both. If you are staying in a rented house, then you are eligible to claim HRA tax exemption. Simultaneously, if you accept taken a firm loan and then you can claim the business firm loan benefits too. If you have bought a house with the help of a dwelling loan and alive in another business firm on rent, yous can claim taxation benefit for both. But if the business firm you bought and the house you lot live in are in the same metropolis, you should have a genuine reason for non living in the house that you own, to prove to Income Revenue enhancement Officer. The reasons could be that the house you lot own is too far from your workplace, or the commute is very difficult.
Can HRA be claimed if I own a house?
No, you cannot enjoy the tax benefits of HRA if you alive in your own house. I cannot pay hire to oneself. Hence, no exemption is bachelor for HRA and the whole of HRA received becomes taxable under "Income from Bacon". But if you reside in a rented property, then you can claim exemption even if yous own a house (in the aforementioned city or in a different city).
Can HRA be claimed for paying rent for 2 houses?
This could be possible only when yous live in both the houses in a particular year for proportionate months.
How LTA is Calculated?
- In instance of LTA , the employer reimburses the travel expenses for the holiday taken by an employee. However, any other expense such as food, shopping, lodging etc. is not included in the exemption. Available for only ii children of an individual, born later on Oct 1st, 1998 including a pace or adopted child.
- Travelling Twice in a block of Four years is immune. The current block is 2014-17.
- Mode of travel should be air, runway or any other public mode of send.
- Allowed for domestic travels and non for international travels.
Can married man pay hire to wife and merits HRA?
Normally, Tax benefit of HRA cannot be claimed by paying hire to your spouse. Then, if you are staying in a house owned past your spouse then HRA exemptions are not available to yous. However, if you still wish to claim exemption, you should be prepare for litigation as Income Taxation Officer might have different view.
Can HRA be claimed by both husband and wife?
Yeah, why not, provided both are paying rent. Also, it will be meliorate if the landlord issues two split up rent receipts or specifies the proportion of rent borne by each person on the rent receipt.
Tin I apply my electric bill as a tax deduction?
There is no tax deduction in respect of electricity neb. Yet, if you are in business then you can claim the same every bit your business expense.
What is section x exemption?
Sec 10 includes those incomes which do not course part of total income i.eastward. exempt income. Like agriculture income, specified interest income, Dividend Income etc.
What is HRA deduction?
HRA or House Hire Allowance is an allowance which salaried individuals receive from their employer for meeting the rental expenses of their business firm. The amount received is partly exempted from taxation, for the employee who are residing in a rented house. In case the employee lives in his/her own firm and does non pay any rent, the unabridged amount would be taxable.
Frequently Asked Questions
Q- Me and my family are living in two different cities and rent for both the houses are paid by me. Can I claim HRA exemption for both the house rents paid?
Every bit per Section 10(13A) of the Income Taxation Deed, 1961 exemption of Business firm Rent Allowance is available to the employee for the rent paid in respect of the belongings which is occupied by himself. Hence, rent paid for the house where your family is living cannot be claimed as an exemption in this case.
Q- How can I merits HRA deduction of previous employer which company has non mentioned in Form-16 but HRA is part of salary?
Fifty-fifty if employer fails to provide HRA exemption benefits of previous employer and deducted higher tax as TDS, the assessee can still avail benefit of HRA exemption at the time of filing of render and claim a refund of such excess tax deducted.
Q- Is it condom for me to give out multiple rent receipts to my tenant?
If you lot give multiple receipts, on papers with unlike serial numbers or on a statement that doesn't bear witness the rest before and after the payment was received, then you're request for problem as information technology could exist claimed that they gave you an actress payment and you lot may be asked past tax department to include that in your income.
Q- How tin I claim HRA exemption paid in another land than the state you piece of work in?
If you are receiving HRA in one state, being the country in which you are working, and then you cannot claim the exemption for payment of rent in another land. You tin can only claim the rent paid in the city of employment for claim of HRA.
Q- What is the solution if I have submitted rent receipt without acquirement postage?
Stamp needs to be affixed on receipts if payment is made in cash more than Rs. 5000. Revenue postage on a hire receipt makes it a legal document, it ways that payment has been received by the recipient and paid by payer.
Q- I am living in a shared apartment with my friend. How tin I get HRA exemptions without affecting my sharing friend with the same rent agreement?
HRA can exist claimed by you and your friend in the same proportion of hire payment.
Q- Is information technology right for me to submit fake rental receipts at my office, to avert tax? Does the Indian state/central govt ever track these fake receipts?
Aye, Income taxation department can track your details as Form xvi is in sync with the ITR course, which will help the Income Tax Department in electronically matching the data reported in ITR.
Q- Is information technology correct to submit a rent receipt with the PAN number of another person's name and the person don't practise earning for tax benefits?
No, rent receipt should take PAN of the person who has paid the rent and not of everyone else.
Q- Does HRA autumn under 80C category?
No, HRA should exist deducted from full Taxable Bacon.
Q- Can I claim both home loan tax benefit and HRA benefit?
Aye, You can merits both HRA exemption and home loan benefits. The fact is that you should really be paying hire f.Both HRA and home loan benefits are governed by different sections.
Q- How exercise I claim HRA if my employer is not paying me the same?
If you are not getting the benefit of Firm Rent Assart and you accept not claimed any of expense for rent paid under any other section of the income tax act, and so you tin claim a deduction under Department 80GG.
Points to Remember: For challenge HRA exemption you need to submit the hire receipts as a proof of hire payment to your Hour/Accounts department.
There is no fix format for rent receipts prescribed.
If paying hire more Rs. 5000 in cash then ensure the revenue receipt is affixed with the revenue postage.
If the annual payment of rent exceeds 100000, then you need to report the PAN No of your landlord.
If you forgot to submit the rent receipts at the time of proof annunciation y'all tin can still claim the benefit of HRA exemption at the fourth dimension of filing your Income Tax Return (ITR).
Source: https://tax2win.in/guide/rent-receipt
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