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How to Guide on Rent Receipts- How to Claim HRA Deduction - Myitronline

A complete guide of rent receipts/integral elements of a rent receipt and format

A rent receipt is an integral document for salaried individuals. A rent receipt consists of the records of all the transactions of rent paid by the tenant to his/her landlord. As a person, you also might have been asked for the rent receipts by your HR or account departments and that's the time you try to take the help of your friends, relatives, or colleagues to get a rent receipt anyhow. A rent receipt is provided to the tenant by the landlord while collecting the rent from the tenant. A rent receipt can be used to avail of the tax benefits and other legal finance services. When an individual wants to claim (HRA) house rent allowances, s/he is required to submit a rent receipt with all other documents. it is compulsory to submit the PAN of the landlord If the amount of paid rent is more than Rs. 1 lakh.

What are the integral elements of a rent receipt?

Following are the important elements of a rent receipt. Date of Payment Rental Period Tenant Name Landlord Name Rented House Address (you are paying rent for) Signature of Landlord PAN No of the Landlord (if annual rent overextends Rs. 1 lakh in a year) Revenue Stamp (if the amount paid in cash is more than Rs. 5,000)

Is rent receipt compulsory to claim HRA?

Yes. A rent receipt is an integral part to claim house rent allowance (HRA). If an employee gets the HRA of more than Rs. 3000 per month, it is essential to present a rent receipt. When an individual wants to claim (HRA) house rent allowances, s/he must submit a rent receipt with all other documents. In case your HRA is less than Rs. 3000, the officer still may ask about the rent receipt to submit.

What is HRA?

The house rent allowance varies based on the salary of the employee and the place of living. An employee of both sectors public and private has a deductible house rent allowance included in their salary. Anyone can easily determine his/her HRA based on salary and accommodated city. An HRA can be claimed only if the employee is living in accommodation or rented property.

Who are eligible to claim HRA?

Certain conditions are required to be eligible for claiming a house rental allowance (HRA). Following are the conditions- The individual who wants to claim HRA must be a salaried employee. The individual must be living in accommodation. You must be acceptable for HRA from your CTC.

HRA Exemption Rules & Tax Deductions

There are certain important rules related to HRA that are applicable for HRA claims. Those rules are as follows- HRA should not be more than 50% of your basic salary An applicable individual can not claim the total amount of HRA in case the exemption is based on the following: 10% of the basic salary of actual rent paid. Actual HRA received from the employer. 50% of the basic salary if the tax-pursuer resides in a metro city. You can claim HRA benefits for a home loan. If you reside in your own house then you can pay rent to your parents and provide acceptable proof to claim HRA benefits. In a similar case, you can’t pay the rent to your spouse and claim HRA. In case of rent exceeding Rs. 1,00,000, the PAN details of the landlord are mandatory to provide along with the HRA claim form. You can deduct 30% tax from the rent and declare the same If the landlord is an NRI.

HRA tax exemption is accomplished based on the following rules-

Exact HRA received. The exact rent paid is reduced by 10% of the salary. 50% of the basic salary if the tax-pursuer lives in a metro city. 40% of the basic salary if the tax-pursuer lives in a non-metro city. You can request that the employer shuffle your salary to avail of full tax advantages. Calculation of house rent allowance (HRA) can be accomplished annually in case the deciding factors remain constant. In case any element transitions happen during the respective financial year, the calculation can be done monthly.

Format of Rent Receipt

below-given is the format for creating rent receipts. It is compulsory to utilize a revenue stamp on these receipts.

How to generate rent receipts online at Myitronline?

To claim HRA exemptions, it is compulsory to submit Rent Receipts to the employer. Following are the steps. This process can be done in a few steps that are given below- Firstly, you need to fill in your name and email address. Secondly, You are required to enter the monthly rent payment paid and house address. Fill out details about yourself and the landlord like (Owner's Name and House Owner's PAN number). Make a Selection of the Period for which you want to generate a rent receipt (Monthly, Quarterly, Annually). Press on the Generate Rent Receipt button, and Myitronline will deliver an email of your Rent Receipt.

How is HRA exempt from income tax?

Although the HRA is part of the salary, unlike the basic salary, it is not taxable at all. A portion of the HRA is exempted under Section 10 (13A) of the Tax Act, subject to certain conditions. The amount of HRA exempted is deducted from the gross salary before the tax deduction.

Is it possible to claim HRA if I pay rent to my parents?

Yes, you can apply for an HRA tax exemption by paying rent to your parents. It is suggested to enclose a lease contract. You will need rent receipts to claim an HRA exemption.

Important points to remember

It is crucial to have a relevant rent agreement. This agreement should consist of all the appropriate details along with the monthly rent, the time of the agreement, or any utility bills. In a case of shared accommodation, all the details must be mentioned in the agreement, along with the number of tenants, and a ratio of how the rent and utility bills are to be divided. Making the payment of rent via cash instead online is considered better because this enables you to keep track of all the transactions easily. One must ask for a rent receipt with a revenue stamp to ensure its validity for tax purposes. You can share rent receipts with the employer to claim house rent allowances (HRA) exemption for monthly rent paid above Rs. 3,000. Excluding rent receipts, if the rent payment exceeds Rs. 1 lakh annually, then it is mandatory to provide the PAN of the landlord to your employer to avail of the full benefit of HRA exemption. The landlord should be ready to give a declaration if PAN is unavailable. Make sure to confirm before deciding on a house for rent. One must also acquire 'Form 60' duly filled by your landlord with the declaration. If an employee might pay a higher payment than the actual amount mentioned in the rent agreement then tax exemption is computed based on the rent receipt conveyed by the employee.

Frequently asked questions

If You want to claim income tax advantages on house rent allowance then you must provide proof of rent paid to the employer. To claim HRA exemptions, it is compulsory to submit Rent Receipts to the employer.

A rent receipt is a crucial document used as proof of the rent paid to the landlord. It is a tool for tax saving and so should be collected and kept safely.

Yes. It is mandatory to provide rent receipts for claiming House Rent Allowance exemption, If you have paid more than Rs. 3000 per month.

Yes. You can claim HRA if an individual’s house rent allowance (HRA) is up to Rs. 3000 per month.

No. You will not get a receipt without the revenue stamps. You will have to get the receipt stamped.

You will not be able to claim HRA in case your landlord does not provide rent receipts. So Make sure to have words with your landlord before accommodation.

No. You are not required to submit rent receipts every month. You can submit your rent receipts on a quarterly, semi-annually, or annually basis.

No. There is no deadline for submitting the rent receipts.

Yes. You can get the get rent receipts for a few months of accommodation.

No worry! If you could not submit the rent receipt before the declaration date. You can still get the HRA exemption. You will need to provide the rent receipt and the PAN of the landlord in case the annual rent exceeds Rs. 1 lakh.

No. It is not compulsory to have a scanned copy of the landlord’s PAN.

Krishna Gopal Varshney

Krishna Gopal Varshney co-founder & CEO of Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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