If you are a employed person and live in a rented house, you have a good opportunity to claim tax exemption under HRA (House Rent Allowance) while filling the income tax return (ITR). But many times the question comes to the minds of people whether it is necessary to give the landlord’s PAN number while claiming HRA? The answer is yes – but with some conditions. Let’s understand in detail HRA exemption means the need for PAN number and the rules related to it.
What is HRA?
HRA i.e. House Rent Allowance is an allowance that employed people when they live in a rented house. It is part of the salary and the government gives tax exemption on one part of it. This exemption is available only in the old tax system. If you choose the new tax regime, then you will not get the facility to claim HRA.
When is the landlord’s PAN number important?
If you want to claim tax exemption under HRA, then it is important to know in which situation it is mandatory to give the landlord’s PAN number:
If your annual fare is more than ₹ 1 lakh (ie more than ₹ 8,333 per month), then you have to pay the landlord’s PAN number to your employer.
If the fare is less than ₹ 1 lakh annually, then there is no need to give PAN number.
If the fare is more than ₹ 50,000 per month, the landlord himself has to submit TDS under Form 26QC and give Form 16C to the tenant.
PAN is not giving land number? What to do?
If the landlord refuses to give PAN number, then you can consider the options given below:
Declaration letter: Take a written letter from the landlord which said that he does not have PAN number. The landlord’s name, address, rent amount etc. should be written in it.
Rent Receipt and Bank Statement: Keep all the receipts related to fare payment and bank transactions, so that if you ever ask for an explanation, then you have evidence.
Documents required to claim HRA
While claiming HRA exemption you will need the following documents:
Landlord’s name and address
Landlord’s PAN number (if the annual fare is more than ₹ 1 lakh)
Rent receipts (every month or quarter)
Rent Agreement (if available)
If the fare is paid through the bank then its bank statement
Note that many companies ask for these documents at the time of proof of investment at the end of the financial year, so keep them ready on time.
Why is this rule important?
The Income Tax Department intends that people who are taking advantage of tax exemption should prove their claims with transparency. By giving PAN number, the tax status of the landlord can also be tracked. This prevents fake HRA claim and the tax system becomes more transparent.
