Salaried employees receiving House Rent Allowance (HRA) as part of their salary structure can claim HRA exemption if they pay rent for their accommodation. According to reports from Zee News, an HRA exemption lowers the taxable salary either wholly or partially. Under the current system, salaried employees claiming HRA are required to provide rent receipts and furnish the landlord's PAN if the annual rent exceeds the prescribed limit.
In the absence of a PAN, an employer can deny the benefit of HRA while deducting tax on salary income. As reported by Zee News, employees can still claim HRA exemption even without the landlord's PAN card. However, they must provide alternative documentation such as rent receipts and other proof of rent payment to support their claim. Recent developments show that tax deducted at source (TDS) will now apply to rent over ₹50,000 per month, including notices on wrongful HRA claims and unverified donations.
Taxpayers claiming HRA, particularly where rent is paid to parents or relatives, must now maintain proper agreements, payment evidence and supporting records to substantiate their claims if questioned. According to TaxAaram, your parents in such cases must declare this rental income in their ITRs. The compliance landscape has tightened significantly, with ITR forms now requiring additional details such as transaction reference numbers and IFSC codes for donations under Section 80G, and the name and permanent account number (PAN) of the political party for claims under Section 80GGC.
HRA remains the needle-mover in the old vs new regime selection, making it crucial for taxpayers to understand the implications. As reported by ClearTax.in, a majority of individual taxpayers—some estimating the proportion to be as high as 90%—have chosen the new tax regime this time around. The new regime offers exemption limits raised to ₹4 lakh with liberalised I-T slabs, while the old regime benefits only those earning over ₹25 lakh if deductions exceed ₹8 lakh plus standard deduction.
