In order to encourage voluntary compliance along with deterring non – compliance, the Annual Information Statement or AIS for specific taxpayers has been made by the income tax department. However, the proper view of a taxpayer’s financial transactions can be given by the AIS. One can get the proper information just by logging and downloading it into https://eportal.incometax.gov.in/. The details which can be found inside the link are details of a taxpayer’s saving account interest along with bank account number, transactions made in stocks, dividend income, foreign remittance information, transactions made in stocks, and other details.
The rental income of a landlord is another interesting and crucial item added in the AIS. However, It has been shown by the AIS that rental income for those who have emitted their premises to other taxpayers; HRA exemption for the rent paid to the landlord is also claimed by them. Let’s figure out how this would work.
In the case of enabling HRA exemption, employers are asked to keep the PAN of the landlord across the employee where over Rs 8,000 monthly will be paid by the employees. Later, these details have been submitted by the employer which is filed in the TDS by them in Form 24Q which is required under section 192 of the Income Tax Act. Let’s better understand it with the help of an example.
Suman is one who hails from Delhi but due to her professional life lives in Bengaluru. Her organization has asked her for an option to claim a house rent allowance (HRA). where HRA holds an important role in the income of a monthly salaried employee. Suman can ask for tax exemption according to HRA rules in case she lives on paid rent or rent.
Just by submitting her rent receipts, Suman can make a disclosure near the employer where she wants to claim HRA exemption. Along with that, she has to also submit the rent agreement which has been rented by her. According to Income tax rules, The PAN should be submitted by the employer if the monthly rent surpasses Rs 8,000. Rs 10000 per month has been paid to Aruna who is a landlord of Suman. Suman told Aruna about a duplicate of the PAN card which she had to submit to the employer. Similarly, the organization collects the same information from all the employees whose rent exceeds Rs 8,000 every month. Later then, the employer can file a return of TDS decreased on a salary by filing Form 24Q where the landlord’s PAN numbers have been reported in order to enable exemption has been enabled.
On the income tax department website when Aruna downloads her AIS she is able to find rental income under it which she can no longer ignore reporting during her income tax returns.
While the government is trying at its best to keep multiple mechanisms in place in order to make assured of rental income is shown to tax. Where the introduction of Section 194I through Budget 2017 was one of them. According to the change, certain (which is not included under tax audit) giving rent to a resident of India, where rent emerges Rs 50,000 each month, are needed to eliminate TDS at 5%.
This alteration was effectively introduced on 1 June 2017. While the final straw is the addition of the rental income in AIS. This keeps a curtain on fake HRA where PAN numbers should be provided by the taxpayers of family members or else wise bogus PAN number supposing is as just a reporting need. No matter any PAN they report their rental income will be planned to that PAN and in case if there any income has not been added in ITR, then income tax notice will become a reason.
Apart from this, a fake rental income has been found by a genuine person in their AIS, which actually he didn’t even have earned. This kind of incident took place when a fake declaration of HRA had been made and that too had been submitted a fake PAN number which is erroneous as not of that landlord. In that circumstances, taxpayers should be required to submit ‘feedback’ on AIS on the income tax e- portal, where they ask for such amount to be ‘incorrect’
In order to enable Pre Filing of ITR which is the main aim of the AIS. Sometimes as the form pauses for some time span, details of all can appear in it related to several incomes, TDS, tax may be pre-filed in the taxpayer’s income tax return.
