Now Reading: Cash rent allowed for HRA, but proper records needed
-
01
Cash rent allowed for HRA, but proper records needed
Paying rent in cash does not automatically disqualify salaried individuals from claiming House Rent Allowance (HRA) under the old tax regime, says a Livemint report. However, since cash payments leave no digital…
The Story in Brief
Paying rent in cash does not automatically disqualify salaried individuals from claiming House Rent Allowance (HRA) under the old tax regime, says a Livemint report. However, since cash payments leave no digital trail, tenants must maintain proper documentation including rent receipts, a rent agreement, and proof of cash withdrawals. Without adequate records, the Income Tax Department may reject the claim.
Tax expert Siddharth Maurya said poor documentation makes an HRA claim difficult to defend if challenged. For monthly rent above Rs 50,000, TDS provisions apply regardless of payment mode. If annual rent exceeds Rs 1 lakh, the landlord’s PAN is typically required. Landlords cannot accept Rs 2 lakh or more in cash in a day under Section 269ST.
The Indian Opinion
The common narrative that cash rent makes HRA claims impossible is misleading. The real hurdle is not cash itself but poor documentation. Tenants often overlook signed rent receipts and the rent agreement. Equally, many landlords fail to declare rental income, and while that doesn't block a genuine claim, it can create trouble if the IT department connects the dots. The test for every tenant: do you have a signed receipt for each month's rent?
Source: livemint.com
This story was synthesised by AI from the source linked above.
