House rent allowance (HRA) is a component of salary received towards the rent paid by the employee for residence. Usually, the employer’s requests for rent receipts from the employees in the last quarter to allow the HRA exemption in Form 16. In case an employee fails to submit the rent receipts to the employer, the employer will go ahead to deduct (Tax Deducted at Source) TDS without allowing HRA exemption. However, you can still claim the tax-exemption benefit available on HRA while filing your income tax return (ITR).
So, in such a case, you will have to calculate the exempt HRA amount manually. Before that, you must also know that an exemption for HRA provided by the employer to the employee can be claimed if the employee incurs expenses towards renting a house for his/her stay. Aarti Raote, Partner, Deloitte India said, "No exemption is available in a case where the residential accommodation occupied by the assessee (taxpayer) is owned by him or the assessee has not incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him."
