Rent receipts - HRA claim

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011 Should employer collect original rent receipts for all the months? or can be half yearly or quaterly

if assesement is done by income tax then how does the employee produce rent receipts for verification?

Selvakumar Selvaraj

Selvakumar Selvaraj (Expert)
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23 February 2011 According to Notification issued by the CBDT, if the rent paid per month exceeding Rs.3000 then it is mandatory to the employer to get rent receipt from the employee. Or else the employee is required to show the receipts on demand to the IT authorities

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011 The rent payments above Rs 3000 Should employer collect original rent receipts for all the months? or can be half yearly or quaterly

if assesement is done by income tax then how does the employee produce rent receipts for verification?

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 February 2011 Please read the following in the matter of rent receipt and HRA deduction.

"-Expenditure must have been actually incurred - It is necessary for granting the exemption under section 10(13A) that the employee should have actually incurred the expenditure on rent. For purposes of deduction of tax, therefore, the disbursing officer should ensure that the employee concerned has in fact incurred the expenditure on rent. The payment of rent should be verified through rent receipts in the cases of all employees – [Letter : F. No. 12/19/64-IT(A-I), dated 2-1-1967.]
Another circular would be of help too; Production of rent receipts - 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. Thus, house rent allowance 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. Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance upto3,000 per month will be exempted from production of rent receipt.
It may, however, be noted that this concession is only for the purpose of tax deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent - [Circular : No. 9/2003, dated 18-11-2003/[Para 5.2-(9)].

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2011 usally employer collects rent paid receipts from the employee to give HRA deducation. is it complusory to collect all 12 months original rent receipt from the employee, if yes then in regular assessment how does the employee show receipt which is already produced to employer?

Querist : Anonymous

Querist : Anonymous (Querist)

Querist : Anonymous

Querist : Anonymous (Querist)

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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23 February 2011 Before finalising tax employer has to collect and verify the documents submitted bny employee.Incase assessment time requires copy only can be submitted.

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