Important news for tenants, tampering with HRA may have to pay a hefty fine
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If you live in a rented house then this news is very important for you. Especially regarding the claim of House Rent Allowance (HRA). The Income Tax Department has alerted that under Section 10 (13A) of Income Tax, if the tenant has claimed HRA in Income Tax, then he should always keep the Rent Agreement and its receipt ready. The department is keeping an eye on this through random scrutiny and will send Income Tax Notice on suspicion of irregularities.
In such a situation, if you are not able to submit the proof, then your claim may be rejected and you may be in big trouble. According to the department, if the claim turns out to be fake, then a hefty fine may have to be paid. According to the department, there is a separate provision for penalty for throwing away the receipt. The amount of forgery will be caught, the fine will also be fixed accordingly.
how much will be the fine
If the amount of rent and receipt does not match, then the first department will cancel the HRA Claim. In such a situation, the Income Tax Officer can ask for proof and if it is not given, the income tax payer will have to pay additional tax. Interest and penalty will be charged on top of this amount.
Tenant can be fined up to 50 percent
According to CA Manish Kumar Gupta, under Section 270A of the Income Tax Act, 1961, the investigating officer has the right to impose a penalty of up to 50 percent for showing wrong income in the income tax claim. This would be considered a deliberate forgery. It will also attract interest under sections 234A, 234B and 234C of the Act.
Provision of 200 percent penalty for showing wrong income
If the income has been shown less or any other mistake has been made in it, then the department can impose a fine of up to 200 percent. The department is doing random scrutiny in the matter of tenancy.
income tax verification
The Income Tax Department verifies the rent receipt in different ways. HRA also checks the amount given in the rent agreement along with the claim. If there is no agreement, then he asks for proof. According to Manish Gupta, the PAN of the landlord is also checked. So do not give any wrong information while claiming the rent. If caught, there can be a hefty fine.
What is HRA
House Rent Allowance (HRA) is a part of an employee’s salary, which is given by the company to cover the expenses of their rented accommodation. Since HRA is considered a part of salary, it is taxable. However, it can be exempted from taxes subject to certain conditions and limits prescribed by the Income Tax Rules. Employees, who receive rent allowance directly from their employer and bear the cost of rent, are eligible for HRA exemption.
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