Tagged: HRA

NTH :: Income Tax Filing Date Extended. You Can Claim HRA Without Landlord’s PAN

Taxpayers who missed the earlier ITR (income tax return) deadline of July 31 can now file their tax returns by August 5.
Business | NDTV Profit Team | Updated: August 02, 2017 09:57 IST


The government has extended the deadline for filing of income tax return (ITR). Taxpayers who missed the earlier deadline of July 31 can now file their tax returns by August 5. Can you claim HRA (house rent allowance) if the landlord is not providing you his or her PAN? If the annual rent paid by the employee exceeds Rs. 1 lakh per annum, it is mandatory for the employee to report the landlord’s PAN to the employer. The tax law also says that in case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address should be filed by the employee.

Tax experts say that an employee can still claim tax benefits under HRA in his or her tax return. “The requirement for furnishing PAN of landlord is only to one’s employer only. However, once a person is to file his/her income tax return, there is no requirement to furnish the PAN of landlord,” says Sandeep Sehgal, director of tax and regulatory at Ashok Maheshwary & Associates LLP.

Even if the company may not allow HRA exemption to the employee, due to non-availability of PAN or declaration by the landlord about not having PAN, still the employee has the option to claim so while filing his or her income tax return, he says.

Mr Sehgal however says that it could attract scrutiny from tax authorities. “The tax authorities can examine the cases to verify the genuineness of the claim made by the employee,” he says. “It is expected that HRA claims will be closely scrutinised henceforth considering the consistent introduction of measures during past few years. In fact, the chances are greater if the claim doesn’t appear in Form 16 but claimed in the return.”

To substantiate the claim, the employee needs to keep a record of the rent agreement/lease deed, rent receipts, intimation to the society for the occupancy etc., says Mr Sehgal. Also, it is advisable to ensure that the payments are made through bank as cash transactions may not be considered genuine, he adds.

Source: https://goo.gl/TPMZVo


ATM :: Can You Claim Both HRA And Home Loan For Tax Exemption?

In some cases, the Income Tax Department may question the tax exemption taken on both HRA and home loan, says an expert.
Written by Surajit Dasgupta | Last Updated: October 10, 2016 10:36 (IST) | NDTV Profit


    Income tax exemption on both HRA, repayment of home loan can be claimed
    However, taxman could ‘closely monitor’ such a situation, says an expert
    Income Tax Department may disallow one of the claims, he adds

Yes, you can claim income tax exemption on both house rent allowance (HRA) and repayment of home loan. If you are living in a house on rent and servicing home loan on another property – even if both the properties are located in the same city – you can claim tax benefit for both.

But “this situation could be closely monitored by the Income Tax Department particularly where the amounts are relatively higher and may also disallow one of the claims if sufficient explanations are not available”, says Amit Maheshwari, managing partner at Ashok Maheshwary & Associates LLP.

  • Mr Maheshwari cites some cases when the tax department may not raise questions:
    When the person may have moved from rented house to own house during the year or vice versa
  • When the person’s own house could be smaller in size and the person may have moved to a bigger house rented by him/her
  • When the children of the person may be studying in the locality of the rented house and during the year it was not possible for him/her to change the school and consequently he/she was not able to move to the new house bought

But in some other cases, the Income Tax Department may question the tax exemption taken on both HRA and home loan, Mr Maheshwari adds.

“Hence, in all such situations, the individual has to ensure that the related documentations (like lease deeds, possession/completion letters, etc.) and justification regarding the same are readily available with him/her if the such query is raised,” Mr Maheshwari says.

Salaried individuals who live on rent can claim HRA to lower taxes. It is partially exempted from taxes. However, if the individual does not live in a rented accommodation, HRA is fully taxable.

The deduction on HRA is the lowest of the following under Section 10(13A) of the Income Tax Act:

  • Actual HRA received from the employer
  • 50 per cent of (basic salary + dearness allowance) for those living in metro cities (40 per cent for non-metros)
  • Actual rent paid less 10 per cent of salary

On the other hand, if you are servicing a home loan you can claim tax benefits on principal and interest payments. Principal repayment, under Section 80C of the Income Tax Act, is exempted up to Rs 1.5 lakh. And on interest repayment, exemption can be claimed up to Rs 2 lakh, under Section 24.

In this year’s Budget, the government had announced an extra deduction of Rs 50,000 on the interest component of home loan for first-time buyers, where the loan does not exceed Rs 35 lakh and the value of the property is up to Rs 50 lakh.

Source: https://goo.gl/SVJdfz

ATM :: Can you claim both, HRA as well as home loan benefits?

Income tax laws allow tax payers to claim various benefits, with respect to the house occupied by the assessee – whether it is owned by you or taken on rent. Conditions for claiming are…
By: Housing.com/news | Retrieved on 27th July 2016 from Moneycontrol.com


Income tax laws allow tax payers to claim various benefits, with respect to the house occupied by the assessee whether it is owned by you or taken on rent.

Conditions for claiming tax benefits on house rent allowance The tax benefit on house rent allowance (HRA) is only available to a person, who receives HRA from his employer and is not available to a self-employed person. To avail of this benefit, the employee should have incurred the expenditure on rent, with respect to a residential house property occupied by him/her. The benefit of HRA is not available on rent paid for a residential house that is occupied by any other person, irrespective of whether he is dependent on the assessee or not. It is also not available, in cases where the accommodation is either partly or fully owned by the assessee himself.

So, if an employee lets out the property to his employer and the employer in turn, allots the same to the employee and recovers some rent on this account, the HRA benefit cannot be claimed. Likewise, if the employee is a joint owner of a property and pays some rent to the other joint owner/s of the property, the HRA benefits on such payment cannot be claimed.

According to rule 2A of the income tax rules, the benefits of HRA shall be restricted to the lowest of the following three amounts:
(a) HRA actually received.
(b) Excess of rent paid over 10% of basic salary.
(c) 50% of basic salary in case the employees is in any of the four metro cities, or 40% in case he resides in any other place.

The law does not stipulate that HRA benefit cannot be claimed, if the tax payer owns a house and is already claiming tax benefits with respect to a housing loan.

Conditions for claiming tax benefits on home loans The main condition, for the allowance of the deduction on the principal and interest components of a home loan, under Section 80 C and Section 24(b), is that the person should be the owner of the house property. Tax benefits under Section 80 C, are only available for home loans taken from specified persons, for a residential house. Interest benefits are available on residential and commercial properties and on money borrowed from banks or from anyone else. Moreover, the interest on money borrowed for a let-out property is fully deductible. For a self-occupied house property, the benefit on interest is restricted to Rs two lakhs per year.

Claiming HRA as well as home loan benefits The laws allows a tax payer to have more than one house property. However, he has to opt for only one such property as self-occupied and offer notional rent, on the other properties for tax. By the same legal provision, it can be inferred that in addition to the rented house occupied by the tax payer, he can have one more house property as self-occupied. If the house property owned by the tax payer is in a city other than his place of work, there would not be any problem. However, if the property is in the city where the rented property is situated, it may be logically difficult to establish that the tax payer is occupying both the houses.

(The author is a taxation and home finance expert, with 30 years’ experience)

Source : http://goo.gl/shtKCC