Automatic HRA Calculator with New Rule lowers HRA exemption claim limit & mandatory to submit the PAN of Land Lord if HRA is over 1 Lakh P.A

Click here to Download the Automated HRA Exemption Calculator ( Updated)

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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 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 and 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/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.

Click here to Download the Automated HRA Exemption Calculator            ( Updated)

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