HRA exemption of over Rs 8,333 a month will need landlord's PAN

Earlier, taxpayers produce a rent agreement or PAN card of the landlord if the monthly rent exceeded Rs 15,000

In an attempt to further tighten its grip around tax evaders, the Income Tax (I-T) Department now wants tenants to produce their landlord's PAN for HRA exemptions of Rs 1 lakh or more annually or Rs 8,333 monthly. This is a new circular issued by Central Board of Direct Taxes (CBDT).

 

Earlier, I-T Department asked taxpayers to produce a rent agreement or PAN card of the landlord if the monthly rent exceeded Rs 15,000, or Rs 1.80 lakh annually. 

 

The CBDT circular says that if a tenant is not able to produce his/her landlord's PAN, he/she must submit a declaration to this effect from the landlord along with the name and address of the landlord at the time of claiming HRA exemption. 

 

I-Tax Department has raised a big cause for salaried taxpayers through this notice. The measure is aimed at salaried professionals who submit counterfeit tax receipts to evade tax payment. Not all landlords are open to producing their PANs or even going through formalities of rent agreement or receipts.