To save income tax, do you give fake rent receipts? You may be in for a shock

To save income tax, do you give fake rent receipts? You may be in for a shock

According to a report in The Economic Times, the Income Tax Appellate Tribunal has recently ruled that the assessing officer can ask for more documents to prove that you are indeed living in the place for which the receipts have been submitted.

The officer, if he suspects the rent receipts are fake, can ask for the leave and licence agreement, letter to the housing society informing about the residence being rented out, electricity bill, water bill, etc, says the report.

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As of now, to avail of the benefit, one only needs to submit rent receipts and in case the rent is above Rs 1 lakh per annum, the PAN of the owner of the residence. But with this ruling, all this will change and the burden of proof will be on the employee who submits the rent receipt.

The ruling by the Mumbai tax tribunal is likely to set a precedent and the salaried class is likely to come under the scanner on this count, the report said.

Employees are allowed to get tax exemption on house rent allowance under Section 10(13A) of the Income Tax Act. Under this section, the employee can get exemption on actual HRA received or 50 percent of the basic salary for metros (40 percent for other cities) or an amount equal to actual rent paid minus 10 percent of the basic salary, whichever is lower.

Source by firstpost….



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