Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: articles on VAT and GST in India :: empanelment :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: TDS :: due date for vat payment :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4%
VAT (Value Added Tax) »
 Cenvat Credit Of Additional Duties Of Customs [Cvd] On Imported Coal
 Excise Dept puts VAT refund on fast track
 Consumer fora receive 18 VAT plaints
 Appointment of Assistant VATO - F.3(14)/Fin(Rev-I)2012-13/DSVI/334
 Bio-diesel body seeks VAT relaxation
 HC seeks Delhi, centre reply on restaurants charging excess VAT, service tax
 Shakti Autos booked for evading VAT, bogus sales
 VAT sops to IOCL Paradip refinery hits Odisha revenue growth
 Government to announce new VAT rates in October
 World Wide Gst, Vat, Sales Tax Rate
 Article on Transition Process of Registrations under VAT / Service Tax Laws to GST Law

Claiming HRA? Get the house owner's PAN
November, 18th 2011

Kalpana Sinha, a tenant in a Mumbai suburb, often tells her house owner that her payment of rentals Rs 30,000 a month do not allow her to claim tax benefits. While the owner is willing to give her a temporary receipt, it contains little detail about the owner.

Sinha would be relieved at the latest circular from the Central Board of Direct taxes, which says that rentals of more than Rs 1.8 lakh a year need to have proper documentation, with the owner's permanent account number (PAN).

Similarly, many chartered accountant advise clients that they can claim house rent allowance (HRA) even if staying in their parents' or spouse's flat. That is, they can pay the rent to their spouse or parents and claim the same. And, often, parents or spouse (especially, if she is a housewife) do not have a PAN. Sometimes, when both are working, they pay rents to each other.


  • CBDT circular says rentals of over Rs 1.8 lakh a year need the owners PAN
  • Those paying rent to parents or spouses flat will need to show PAN
  • Owner needs to give declaration in absence of PAN
  • HRA payment can be traced through owners PAN
  • Cash rentals mostly practised when HRA is huge, hence the threshold of Rs 1.8 lakh
  • Owners PAN, if not furnished before due date, may result in HRA benefits being withdrawn

Such people now need to be more careful. Payment of HRA can be traced through their spouse or parent's PAN numbers. As a result, taxes will have to be paid on such rentals by the recipient.

Amitabh Singh, tax partner at Ernst & Young, explains, "There are many who show they pay rent to their family member and claim HRA benefits. The employee may be doing this only to get HRA and the family member may not be reporting the rental income." This is mostly practised where the HRA in question is a big amount. Hence, the tax authorities have kept a threshold of Rs 1.8 lakh or rent of Rs 15,000 a month.

In case the house owner does not have a PAN, a declaration to this effect from him/her, with name and address, should be filed by the tenant-employee, it further says. It should be signed by the landlord, with a valid identity proof such as passport details, ration card or voter's card. A copy of the declaration format should be given to the tenant.

Since the circular's introduction in August, tax consultants say they have started advising clients to obtain the PAN of the house owner. They say if this is not furnished before the due dates for filing proofs on tax-saving investments, that is, before February 2012, the HRA benefits may be withdrawn, because there are no alternatives provided in the circular if the woner's PAN/declaration is not available. And, the additional tax liability for 2011-12 may be recovered between January and March 2012.

However, the circular is silent on whether the employee's HRA can be honoured in the absence of such documentation. "Because, the law or the Income Tax Act does not prohibit anyone from getting HRA benefits in the absence of landlord's details," says Kaushik Mukherjee, ED (tax & regulatory practices), PricewaterhouseCoopers. Section 10 (13A) on HRA benefits does not have any clause where the claim will not be honoured if the house owner's details are not attached by the tenant or HRA claimant.

Experts say as long as you can provide details like the rent receipt or rent agreement, there should not be any problem. And, rent agreements are supposed to also have the house owner's PAN details. "The problem gets solved if you pay the rent online or through cheques. You can also show your bank account statements. These are good enough proofs and you cannot be denied your claim," says Homi Mistry, tax partner at Deloitte, Haskins and Sells.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions