What exactly is HRA?
HRA is the House Rent Allowance that salaried employees receive from their employers. HRA is a typical instrument that can be utilised to claim income tax exemption when filing an ITR. As a result, an error-free HRA computation is critical when filing an ITR. House Rent Allowance (HRA) is one of the most popular reimbursements granted by salaried workers. If you pay rent to a landlord, who can also be your parents, you may be able to claim a tax deduction for the rent you pay.
The ITR-1 form corresponds to the Form-16 that salaried individuals get from their employers as a TDS certificate. As a result, claiming the HRA exemption is simpler because you only need to copy the information from Form-16 and paste it into ITR-1.
HRA documents
You must have the following documentation to claim HRA:
- Rent receipts: As proof of rent paid, you must furnish your employer with rent receipts. The landlord’s name, the address of the rented accommodation, the time for which the rent has been paid, and the amount of rent paid should all be included on the rent receipts.
- Rent agreement: As verification of the rented accommodation, you may be required to present a rent agreement. The rent agreement should be on stamp paper and include the landlord’s name, the address of the rented accommodation, the length of the rental agreement, the rent amount, and both the landlord and tenant’s signatures.
- Salary slips: The amount of HRA received from your company should be noted on your salary slip.
- PAN card: You may be required to present your PAN card information to your employer in order to claim HRA.
- Form 12BB: To claim HRA, you must submit Form 12BB to your employer. Form 12BB is a declaration form that includes the amount of rent paid, the landlord’s name and address, and, if available, the landlord’s PAN.
Conclusion
In conclusion, it is critical to have the relevant documentation to support your claim and comply with tax requirements when claiming House Rent Allowance (HRA). A rent agreement or lease agreement, rent receipts issued by the landlord, and proof of rent payment such as bank statements or cancelled checks are examples of these documents. It is critical that the rent receipts include the landlord’s name, address, and other pertinent information. By keeping these documents on hand, you can substantiate your HRA claim when completing your Income Tax Return (ITR) and potentially take advantage of the tax benefits connected with HRA, lowering your overall tax obligation.
