PAN of Landlord Mandatory for Claiming HRA (For rent exceeding Rs. 1 Lakh p.a)

The Income-tax Department has issued a new circular No 8/2013 dtd 10th October 2013.

This circular provides the procedures to be followed for Tax Deduction at Source on Salaries during the year 2013-14

In this circular, the Income-tax Department has provided as follows :-

1) Where the House Rent Allowance (HRA) amount is than Rs 3000/- per month, those salaried employees will be exempted from production of Rent Receipt. This exemption is applicable for the limited purpose of TDS and however in regular assessment procedures, they employee needs to provide the rent receipts during the assessment.

2) if annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. 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 employee.

The Other Important provision in the circular reads as under :-

The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/ subscriptions / payments made by the employees, by calling for such particulars/ information as they deem necessary before allowing the aforesaid deductions. In case the DDO is not satisfied about the genuineness of the employee’s claim regarding any deposit/ subscription/ payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer.

In view of the above, in respect of employees providing declaration from the landlord, the employers may request the employees to provide the Identity and address proof of the Landlords along with the Declarations to satisfy about the genuineness of the declaration.

The relevant circular is reproduced below :-

[gview file=””]