Get landlords' PAN on plain paper for HRA claim

Salaried taxpayers, who want to claim Income Tax exemption on house rent allowance exceeding Rs 100,000 per annum, will have to obtain the Permanent Account Number and other details of their landlord on a plain A-4 size paper before submitting it to their employer.

A number of tax department officials PTI spoke to said the circular does not state that such a document has to be a 'sworn affidavit' or a 'notarised document'.

Hence, an individual should obtain the information from his or her landlord on a simple plain A-4 size paper.

The tax returns and exemptions filing season will gather momentum in the coming days as the financial year closes on March 31 (2013-14).

"The department has a number of technical platforms to check the authenticity of this information that is provided to it by a salaried taxpayer.

“The circular has not stated explicitly about the kind of document so it is considered that a plain piece of paper would do," a senior department officer said.

The Income Tax department will require this document to enable exemption for a taxpayer under House Rent Allowance (HRA) after the Central Board of Direct Taxes issued a ciruclar in this regard in October last year.

The circular (08/2013) states that ". . . an employee claiming exemption from tax with respect to House Rent Allowance received is now required to report the PAN of the landlord to the employer, if the rent paid by the employee to the landlord exceeds Rs 100,000 per annum, along with the rent receipt."

It further adds that "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 employees."

The employee may also furnish the address of the rented property and the address of the landlord in the same piece of paper, another I-T official said.

In case a landlord refuses to given his or her PAN card details to the tenant, officials said, the tax department could initiate remedial procedures under the I-T Act.

The idea behind this move by the CBDT is two-pronged. While the government wants to stop the abuse of fake HRA claims, it also wants to net those people who do not furnish correct information of rent income.

Illustration: Uttam Ghosh/Rediff