Rent Above Rs 1 Lakh; Submitting Proof Obligatory for HRA Tax Deduction

The Circular on TDS on Salaries for FY 22-23 has been released by the Central Board of Direct Taxes (CBDT).

Under the circular Drawing & Disbursing Officer (DDOs) is authorized u/s 192 to permit some deductions, exemptions or allowances or set-offs of certain loss since the provisions of the act for finding the taxpayer’s income or calculating the tax-deductible amount under the mentioned section.

The evidence/particulars for the deductions/exemptions/allowances/set-off of loss which the employee claimed such as rent receipt for claiming deduction in House Rent Allowance (HRA), evidence of interest payments for claiming loss from self-occupied house property, etc. is not being present to the DDO.

For drawing certainty and uniformity towards the case, the individual is obligated to pay DDOs that would receive from the taxpayer evidence or particular claims such as House rent Allowance (where aggregate annual rent is more than Rs 1 lakh), as per section 192(2D).

House Rent Allowance and its Computation

Under section 10(13A) of the Act, other allowances are particularly provided to taxpayers via their employer to fulfil the expenses made on the rent payment related to residential accommodation which the taxpayer has occupied would be exempted from the income tax. As per the allotment of the special allowance, the quantum of exemption permitted on the basis of the grant so as to fulfil the expense on the rent payment would be the least of the below-mentioned.

Read Also: How to Claim Tax Exemption on HRA When You Work from Home?

Towards the same, the salary comprises of the dearness allowance, when the terms of the employment are being furnished however it does not count all the additional allowances and perquisites. The real expenditure made on rent payments for the residential accommodation that the taxpayer occupied via taxpayer is as per the limits drawn down in Rule 2A and would be entitled to the exemption from the income tax.

What Proof Could be Opted via the Employer as Proof of Rent?

• Rent Agreement
• Rent Receipts
• PAN/Aadhaar of Landlord etc