Requirement of reporting Permanent Account Number (PAN) of Landlord:

It has been further required in the said circular that if the actual annual rent paid as claimed by the employee exceeds Rs 1,00,000 per annum ( or Rs. 8333.33 per month), it is mandatory for the employee to report Landlords PAN details required for claiming HRA. 

landlord does not have a PAN, employee is required to obtain a declaration to this effect from the landlord along with the name and address of the landlord and such declaration should be filed by the employee with the employer. 

CBDT through a recent circular, issued some benchmarks for claiming HRA.

CBDT Instructions to employers:

Central Board of Direct Tax  in its circular no 08 dated 10th October, 2013 on the subject of Income-tax deduction from salaries during the Financial year 2013-14 has emphasised that the disbursing authorities should satisfy themselves in this regard.

Central  Board  of  Direct  Tax  in its circular no 08 from salaries during the Financial year 2013-14 has emphasised that the disbursing authorities should satisfy themselves in this regard.

As per circular, employer should insist 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.

Requirement of production of Rent Receipt:

As per circular, it has been decided that those employees who are paid house rent allowance up to Rs.3000/- per month will be exempted from production of rent receipt before the employer for claiming tax exemption.

However, it has been clarified that that the concession of non-production of rent receipts for employee as above is only for the purpose of tax-deduction at source from salary, and, in the regular assessment of the employee, the Income Tax Officer apart from rent receipts, can make any enquiry which he considers fit for satisfying that the employee has incurred actual expenditure on payment of rent.

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