19 Nov, 2013 9:14p.m.

Landlord's PAN must for HRA exemption for rent exceeding 1,00,000 PA

The income tax department has lowered the limit for exemption from producing the landlord's PAN number.  The government has made it mandatory for an employee claiming HRA exemption to report the PAN of the landlord to the employer if annual rent paid by the employee exceeds Rs. 1,00,000 per annum, that works out to Rs. 8333 per month. Earlier the limit was Rs. 15,000 per month. These measures are taken to curb the practice of producing counterfeit rent receipts for claiming tax deduction under HRA. The new rule is effective from the financial year 2013-14 or Assessment Year 2014-15.

"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 said in a circular.

In case the landlord does not have a PAN, employees they have to submit a declaration, with the name and address of the landlord. 

The limit is only for exemption for producing the PAN number. Even if the employee pays rent below Rs. 8,333 per month and above Rs.3000, he/she has to produce the rent receipts availing deduction under HRA. 

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