New rule lowers HRA exemption claim limit
TNN | Nov 19, 2013, 06.07AM IST
If you are a salaried taxpayer claiming HRA (house rent allowance)
deduction, watch out. The central government has lowered the exemption
limit for reporting the rent received. Salaried taxpayers claiming HRA
exemption and paying a rent of over Rs 1 lakh per year have to give
landlord's PAN (permanent account number). Till now, if the total rent
paid was less than Rs 15,000 a month there was no need to submit the
landlord's PAN details. The new rule effectively lowers the rent limit
from Rs 15,000 a month to Rs 8,333 per month for claiming HRA
exemption without making any disclosures.
"Further, 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," the Central Board of Direct Taxes said in its latest
circular. "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," it said.
Though incurring actual expenditure on payment of rent is a
pre-requisite for claiming deduction under section 10(13A) of the
I-Tax Act, it has been decided as an administrative measure that
salaried employees drawing HRA up to Rs 3,000 per month will be
exempted from production of rent receipt.
The new rule is aimed at people claiming HRA exemption for living in
their own house. "It has to be noted that only the expenditure
actually incurred on payment of rent in respect of residential
accommodation occupied by the assessee subject to the limits laid down
in Rule 2A, qualifies for exemption from income-tax," CBDT said in its
circular.
Thus, HRA granted to an employee who is residing in a house/flat owned
by him is not exempt from income-tax. "The disbursing authorities
should satisfy themselves in this regard by insisting on production of
evidence of actual payment of rent before excluding the house rent
allowance or any portion thereof from the total income of the
employee," CBDT said.
http://timesofindia.indiatimes.com/business/india-business/New-rule-lowers-HRA-exemption-claim-limit/articleshow/26011658.cms
CS A Rengarajan
9381011200
CS Benevolent Fund is a collective effort towards extending the much
needed financial support to the community of Company Secretaries in
times of distress Let us lend support and join for noble cause.
SHARING KNOWLEDGE SKY IS THE LIMIT
This mail and its attachments (if any) are confidential information
intended for persons to whom the email is planned for delivery by the
sender. If you have received this mail in error please notify the
sender of the error by forwarding the email and its attachments (if
any) and then deleting the mail received in error and the relevant
email trail in this connection without making any copies or taking any
prints.
------------------------------------
receive alert on mobile, subscribe to SMS Channel named "aaykarbhavan"
[COST FREE]
SEND "on aaykarbhavan" TO 9870807070 FROM YOUR MOBILE.
To receive the mails from this group send message to aaykarbhavan-subscribe@yahoogroups.comYahoo Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/aaykarbhavan/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/aaykarbhavan/join
(Yahoo! ID required)
<*> To change settings via email:
aaykarbhavan-digest@yahoogroups.com
aaykarbhavan-fullfeatured@yahoogroups.com
<*> To unsubscribe from this group, send an email to:
aaykarbhavan-unsubscribe@yahoogroups.com
<*> Your use of Yahoo Groups is subject to:
http://info.yahoo.com/legal/us/yahoo/utos/terms/
What date is this effective from ?
ReplyDelete