FAQs about Rent Receipt Format & Declaration from Landlord

To claim Income Tax Exemptions under House Rent Allowance (HRA) or even under Section 80GG, it is mandatory to submit Rent Receipt Format to the employer.

Part of HRA gets exempted under Section 10 (13A) of the Income-tax Act, subjected to certain conditions. The exempted HRA is deductible from the total income before arriving at a taxable income.

In case an individual is not paid HRA, as part of his salary, an employee paying rent for a furnished/semi-furnished/unfurnished accommodation can save Income-Tax under 80GG of the I-T Act.

Q1. What are rent receipts?

This is a proof of transaction of the rent paid by a tenant to the landlord. A rent receipt format is a document provided by the landlord on receipt of the rent from the tenant. His signatures are placed on it. Rent receipts can be used to avail benefits during ITR Filing and for legal matters, if necessary.

Q2. Steps to Rent Receipt Format?

This can be done in just 4 simple steps:

  1. Filling in the required details,
  2. Print the rent receipt format,
  3. Get the receipt stamped & signed by the landlord,
  4. Submit Rent Receipt to your employer.

Avoid the last minute fight to arrange your rent receipts for claiming HRA exemption. Download the form below and save taxes. It is fast, convenient and easy.

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Q3. What are the elements of a rent receipt?

A Rent Receipt format should cite “The transaction of rent happens between tenant & landlord on a certain date each month for a premise having an address and rent of xxx amount for the period of a month.”

The elements as below must be mentioned there

  • Tenant’s Name (If you are the tenant, fill in your name),
  • Landlord’s Name,
  • Amount of Rent,
  • Date of Payment of Rent,
  • Rental Period,
  • Address of the Rented Property,
  • Signature of Landlord or Manager.

Other elements that may be required, conditionally, on rent receipts:

  • PAN number of the Landlord,
  • Revenue Stamp(where amount exceeding Rs. 5000 is paid in cash),
  • Method of payment (cash, NEFT, credit card, etc.),
  • Services or other charges included in the payment (e.g. utilities, security deposits, maintenance charges etc.).

Q4. What is the template for Rent Receipt?

No set format for rent receipts has been prescribed, under the law. The basic elements have been mentioned in the answer above.

Q5. What is HRA?

HRA is short for House Rent Allowance. Its a common component of the salary provided by an employer to his employee for his rented accommodation. An exemption under HRA can be claimed only if the employee is residing in a rented house.
It is given on the basis of the cost of living in a particular city or region where the company or its operations are based.
Unlike basic salary, HRA is not fully taxable. A part of HRA gets exempted under Section 10 (13A) of the Income Tax Act, 1961, Subject to certain conditions.

Q6. Who can avail Income Tax Exemptions for HRA?

You can claim HRA Tax Exemptions, if:

  1. You are a salaried employee.
  2. HRA is a part of your salary package/CTC.
  3. You live in rented accommodation.

Self-employed professionals cannot avail this deduction. The amount of exemptable HRA  is deductible from the total income before arriving at a taxable income. This helps Save Income Tax.

Q7. Document required to claim HRA?

You are required to submit relevant documents like all filled up rent receipt format, Residential Rental Agreement to your employer before the end of the financial year. When the amount of annual rent exceeds Rs. 1 lakh, then the PAN of the landlord is also necessary. This will get your exemption in Form-16 and you can avoid further hassles during your ITR Filing.

Q8. Can I claim HRA every month?

Deduction for HRA is available for rent paid monthly by you. And you would need to submit proof of rent payment to claim HRA exemption. HRA claim for the financial year will be given to you at the end of that year on submitting the required documents.

Q9. Is it compulsory to submit proof of HRA to Employer?

It is necessary for the employer to collect proof of rent payment. Any exemption or deduction on HRA will be based on these rent receipts, only.  Your final liability, at the time of ITR Filing, will be calculated accordingly. He’ll adjust the Tax Deducted at Source (TDS) so you don’t have to pay tax on HRA. It is your employer’s responsibility as per the Income Tax Act.

Q10. Do I need my landlord’s PAN number?

If the annual rent paid is more than Rs 1,00,000, it is required to obtain PAN of the landlord and report it to the employer to claim HRA exemption.

Q11. Do I need a photocopy of my landlord’s PAN card?

No, only his PAN number is required to be mentioned on the rent receipt format.

Q12. What if I didn’t get the PAN number from my landlord?

If the amount of annual rent is exceeding Rs 1 lakh, the PAN of the landlord is mandatory. That is, you are paying a monthly rent of Rs. 8,333 or more. However, when the landlord does not have a PAN, you must take a declaration to this effect from him. Stating his name and address details along with mentioning that he doesn’t have a PAN.

Download Declaration Form Here

Q13. Why is the PAN number of my landlord required?

The reason is to track fake receipts being submitted by employees to claim HRA exemptions.

Q14. What do I do if my landlord refuses to provide a rent receipt?

Without the rent receipts from your landlord, you will not be able to claim HRA exemption. You must discuss such matters with the landlord before taking the accommodation on rent.

Q15. I forgot to submit the rent receipt format to my company. Can I claim it myself?

Yes. If you didn’t submit rent receipt format at the time of proof submission, you are eligible to claim HRA later when you go for Income Tax Return Filing.
You can enter the amount of HRA directly in your Income Tax Return. First, calculate the exempt portion of HRA. This exempt amount is to be reduced from your total taxable salary. In your ITR, this net amount is shown as your “Income from Salary“.
Thereafter, you must maintain rent receipts and lease agreement readily available. So that if there is an enquiry from the tax office/Central Processing Centre (CPC), these are produced immediately.

Q16. What evidences are required for claiming HRA exemption?

The only documents you require are the Rent Receipt Format issued by your landlord.

Q17. Is there a deadline for submitting my rent receipts?

The employers themselves provide a deadline by which all tax proofs must be submitted. They need time to calculate, deduct and deposit TDS. By submitting your rent receipts and other proofs early, you can make sure TDS on Salary Income is exact.

Q18. Do I need hard-copy of rent receipt format or is a soft copy valid?

You can check with your employer about the format in which you have to submit.

Q19. Do I need the rent receipts for all 12 months?

Generally, the employer asks for rent receipts for the last 3-4 months, from the deadline date.

Q20. Do I need a rent agreement with my landlord?

Yes, you must take a copy of the rent agreement with your landlord. It would have details of the accommodation on rent, amount and period rent. This document may be required to be submitted to your employer.

Q21. Is revenue stamp required to be affixed on the rent receipt format?

You need to affix a revenue stamp on your rent receipt format if cash payment is more than Rs. 5000 per receipt. Whereas, if the rent was paid through cheque then revenue stamp is not required.

Q22. Can I claim a deduction for HRA if I don’t get it as a salary component?

Yes, as per Section 80GG of the Income Tax Act, you can claim a deduction in ITR Filing, if don’t receive HRA but still pay rent. The deduction allowed is the least amount out of these 3:

  1. Rent paid minus 10% of your total income before allowing deduction under this section,
  2. 25% of your annual salary, before allowing any deduction under this section,
  3. Rs 5,000 per month or Rs. 60,000 annual.

Q23. What if I am claiming home loan deduction?

Yes, if you’re a homeowner and you are paying instalments towards a home loan. You are allowed to avail both the benefits, for the home loan (under Interest paid & Principal repayment).  However, the same is not available in the case of Section 80GG.

Q24. How much HRA is exempt from tax?

The least of the three amounts calculates as below, is exempt from Income Tax, under section 10(13A):

  • Actual HRA received,
  • 50% of basic salary if you live in a metro city, (Mumbai, Delhi, Chennai and Kolkata),
  • 40% of the basic salary if you live in a non-metro city.
  • Actual rent paid less 10% of the salary.

Q25. How much exemption can be availed of u/s 80GG?

The least of the following can be claimed for exemption under Section 80GG, in ITR Filing:

(a) Rs. 60,000 annually. i.e. Rs. 5,000 per month;

(b) Rs. 25% of your annual salary, before allowing any deduction under this section;

(c) Total rent paid – (less) 10% of your total income before allowing deduction under this section.

Q26. How to calculate HRA?

An individual with a monthly basic salary of Rs.18,000. Receives an HRA of Rs.8,000. Actual rent he is paying is Rs.9,200, for a residence in a metro city.

To avail HRA benefit, the least of the following amount is exempted, rest is taxable:
Actual HRA received = Rs.96,000,
50% of salary (metro city) = Rs.1,08,000 (50% of Rs.2,16,000)
The excess of rent paid annually over 10% of annual salary = Rs. 88,800 {Rs.1,10,400 – (10% of Rs.2,16,000)}

Rs.88,800 gets tax exemption and only the balance of Rs.7,200 gets added to his taxable income.

Q27. If I am paying rent to an NRI, can I still claim HRA?

In case of payment to an NRI, you are required to deduct TDS @ 30% to claim any expenditure or deduction. Therefore, if your landlord is an NRI, you should pay the rent after deducting TDS @ 30%.

 Q28. I have changed jobs this year. Do I need to share my old rent receipts with the new company?

If your current employer is allowing HRA exemption on income from your previous job, you would be required to submit your old rent receipt format. You’ll also need to disclose your salary from previous employment to your current employer in Form 12B.

Q29. I was in a rental apartment for only a part of the year. Can I claim HRA?

Yes, you can claim HRA exemption for the months you paid rent. The tax benefit is available only for the period in which the rented house is occupied.

Q30. Can I claim HRA exemption with rent receipt format from my family members?

Yes, as long as you are not one of the owners of the premises you are residing in. So, if you are renting the house from your parents, you would need documentary proof of financial transactions regarding tenancy. Thus a record of banking transactions and rent receipts must be available, else your claim can get rejected.

Q31. If I own a house in City A but living in rented accommodation in city B. Can I avail of exemption?

Yes, as long as you are earning any House Property Income from your house in City A.

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