Claiming HRA Tax Exemption? You may get a TAX NOTICE
(Last Updated On: August 28, 2019)
Let me explain, a recent judicial pronouncement has given powers to your Assessing Officer to check all your documents to see whether the HRA claimed by you is genuine or fake.
So, what we do to avoid such situation?
In this blog post, we are going to tell you the correct way of claiming HRA exemption. To help you enjoy tax exemption and at the same time save yourself from future notices and penalty from Income Tax Department.
Here’s how you can legitimately claim HRA tax exemption-
Reside in that house :
Avoid payment in cash:
Become cashless. As far as possible do not pay rent in cash. Even if you are paying electricity and water bill, we suggest you to pay through bank . Keep safe the copies of water ,electricity bill & rent receipts. But if you still have to pay in cash then put a stamp of Re 1 on the rent receipt.
Pay TDS on rent:
If you pay monthly rent of Rs. 50,000/- or more then from June 2017 you need to deduct TDS on payment and pay to government treasury.
Have Your Documents in place:
One thumb rule when dealing with money is keep your documents ready. Whenever you take a house on rent, take one step further and sign a rent agreement with your landlord. Ensure all the details of your terms with your landlord should be stated very clearly in the agreement.
Claim correctly In Your Income Tax Return:
Got more questions? You can look for answers in our widely researched FAQs on claiming HRA exemption.
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