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: VAT Audit :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: TDS :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: form 3cd :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: due date for vat payment :: list of goods taxed at 4%
Direct Tax »
 CBDT unveils norms for computing FMV of trust assets
 CBDT starts issuing second round of Certificates of Appreciation to tax payers
 Income Tax Department Launches SMS Alert Service on TDS Deductions
 Salaried taxpayers to get SMS alerts for TDS deductions
 Salaried tax payers to get SMS alerts on TDS deductions
 Mumbai zone direct tax collection flat in H1 FY17
 CBDT issues final rules for taxing share buy back by companies
 CBDT issues final rules for taxing share-buyback
 The direct tax collections up to September, 2016 are at Rs. 3.27 lakh crore which is 8.95% more than the net collections for the corresponding period last year.
 IDS is tremendous success: CBDT chief Rani Singh Nair
 Submit monthly data of appeals disposed of: CBDT to officers

Ensure your house owner will furnish a PAN
November, 22nd 2013

Software developer Ashu Chawla pays Rs 30,000 towards, but has been able to claim house rent allowance (HRA) exemptions only half the amount of Rs 15,000. Chawla, who has been staying a rented apartment for over two years now, has received an acknowledgment from her landlady for the amount she pay's through cheque. But Chawla has been hit by a huge tax-deduction from her employer, and hence is now planning moving to another rental apartment, she says.

Ashu's is not an isolated example. Many individuals staying in rented apartments could be faced by higher tax-deductions as the IT department. A recent circular issued last month by the Central Board of Direct Taxes (CBDT) has mandated that tenants will have to produce their landlord's Permanent Account Number (PAN) for HRA exemptions of Rs 1 lakh or more annually, which works out to a rent of Rs 8,333 or more monthly. In other words, if you are paying a rent of more than Rs 8,333 per month, you must furnish the PAN details of your landlord to your employee.

Two years back, the Board had issued a similar circular asking taxpayers to produce a rent agreement or PAN card of the landlord if the monthly rent exceeded Rs 15,000 a month, or Rs 1.80 lakh or more annually. With the recent circular, the CBDT has further tightened the norms for deductions at source, which will affect rent payers even below the Rs 1 lakh per annum bracket.

The CBDT circular says that if a tenant is not able to produce his/her landlord's PAN, he/she must submit a declaration to this effect from the landlord along with the name and address of the landlord at the time of claiming HRA exemption. 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 should be given to the tenant.

However, there could be cases where the landlord refuses to help with PAN details or a declaration. “In that case, an employer may reject the HRA claim due to lack of documentation as mentioned in the circular,” says Amarpal Singh Chadha, tax partner at EY. That is, an employee will have to forego the HRA benefit. This circular is issued for employers, who are not suppose to provide the HRA benefit without getting the documents asked for.

Further, landlords will also have to keep an account of the payments received. Sometimes, family members pay rent to their parents. Now such landlords 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, depending on the Income Tax slab in which the landlord comes under.

If the document is not furnished before the due dates for filing proofs on tax-saving investments, that is, February 2013, the HRA benefits may be withdrawn, because there are no alternatives provided in the circular if the documents are not provided. Hence, it will make sense to rent a place where the landlord is open to providing documents.

However, the Income Tax Act has no amendment to this effect, says Gautam Nayak, partner at Contractor, Nayak & Kishnadwala Chartered Accountant. "Because, the law or the Income Tax Act does not prohibit anyone from getting HRA benefits in the absence of landlord's details," he says. Hence, circular does not specifically say the employee's HRA cannot be honoured in the absence of such documentation.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

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