ITR Filing: Important News! Save Tax If You Live In A Rented House

If you have not yet filed your Income Tax Return, file the return immediately. The last date for recording individual returns is soon approaching. You can file your Income Tax return by 31st December. You can file your return on your own by visiting the e-filing portal of the Income Tax Department.

The Income Tax Department has made an appeal to the taxpayers to file ITR through the e-filing portal. Income Tax Department states that ITR filing can be done by visiting the official websites.

The new portal has got a lot of new features like an easy download facility for Form 26AS. Form 26AS is known as the Annual Statement Form. It is one of the important documents, as it contains all the tax-related information of the taxpayer like TDS, Advance tax, etc.

How To Get Exemption On House Rent?

If you wish to get an income tax exemption on the amount you pay as house rent, then the first condition is you should be salaried. Your salary includes House Rate Allowance (HRA), which is tax-exempt up to a certain limit under Section 10(13A) of Income Tax.

(i) If you have submitted the rent agreement or rent receipts to your employer

You are required to submit the rent agreement or the rent receipts to your employer for a lower deduction of taxes from your salary. Once it is submitted, the tax-exempted portion of the HRA received by you is seen in Form-16. There is a possibility that either the entire HRA received during the FY 2020-21 can be exempted from the tax or only part of it is exempted, depending on which of the criteria you meet.

(ii) If you have not submitted the rent agreement or the rental receipts to your employer

If you have not submitted the proof to your employer, then you will be required to manually calculate the tax-exemption portion of the HRA received by you. This is because your employer must have made an assumption that the entire HRA paid to you is taxable. This can be done easily through various online portals.

Points To Be Remembered

Yet while filing the ITR, you are not required to send or upload any document to the department but during the processing of your ITR, the tax department may ask you to provide the proofs of the HRA exemption that has been claimed by you.

If the annual rent paid by you exceeds the limit of Rs 1 lakh, then the department may ask you to provide the PAN details of your landlord as well. Therefore it is advisable to make payments through your bank account as these payments are reflected in the ITR of the landlord as well. Therefore, one should keep the proofs of HRA exemption handy in case the department asks for it.

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