generally rent agreement required as proof of rented premises, but its not mandatory, submit rent receipts with IT Department as proof of rented premises and its not mandatory to transfer only bank but remember to show less then 20000 in a day to mother as rent coz above 20000 may reject due to maximum limit of exp in day ( from FY 2017-18 its reduced to 10000 per day.)
Inconsistencies/formula errors while filing ITR
My HRA claim got rejected in ofc due to address of the landlord missing on the rent receipts submitted. I claimed HRA refund while filing ITR last year. This led to mismatch in my income as per Form 16 and what I showed while filing ITR. I gave the PAN number of my mother as the PAN of the landlord. I dont have a rent agreement nor she has a bank account to show proof of transaction. However, she filed ITR last year on the basis of rental income received from my end. Could you please help me with the reply to be given to the IT department?? Is it mandatory to have a rent agreement or to show proof of bank transactions as rent paid?
Asked 7 years ago in Income Tax
Ideally there should be a rent agreement and payments are to be proved.
The best option would be to convince the company for the HRA claim, showing the rent receipts; thereby solving the problem.
If the company doesn't allow the claim, you can submit the rent receipts in reply to IT but the chances of getting them passed is rare. This would only invite enquiries and litigation.
Hi,
Rent agreement and bank transactions are ideal to have, not a compulsion. However my suggestion is it is better to convince the company and get it incorporated in Form 16 else it gets difficult to get the exemption later.
If you have a query from the IT department now, you will have to prove by the tax return filed by your mother as proof.
Regards,
Nikhil.
As you claimed HRA in ITR and there is no HRA benefit provided to you by your company due to missing of your mother name on rent receipts resulted into difference of income shown in ITR and income reflecting in Form16/ Form 26 AS.
In reply to income tax notice,submit copy of ITR of your mother which is reflecting the total rent paid by you. As you are a salaried limit of RS. 10,000 is not applicable to you.
Also rent agreement and transactions are supportive evidence but as you said your mother has paid tax on total rental income paid by you,it is enough proof for you to claim HRA.
Thanks
Rent agreement and rent receipt should be there as proof of rent paid .
Hi,
It's not mandatory to have a agreement and entry in the bank statement. However, considering the Transaction is between relatives, tax department will certainly ask for it to prove the genuinity of the transaction.
We can help you in drafting suitable reply for the same.
Please feel free to call/ revert me on caabhishekdugar@gmail.com.
Thanks and regards
Abhishek Dugar
CA CS B.Com
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