Because from now on, this is going to be a big problem for those who use fake rental income to claim HRA, since the income tax department has started asking for more documents. Rental receipts are used as proof that you have actually paid the amount and that you are not showing false expenses to save tax. If you are applying for an HRA exemption, you must submit certain legal documents such as a receipt or agreement and proof of identity of the owner. You can also apply for an HRA exemption on your income tax by filling out Form 12B. You can see the snapshot below… Most employees have difficulty understanding the purpose of rental income or how they can be used correctly for tax deductions and sometimes even make false receipts to benefit from tax benefits. Since making these rental incomes available is a ritual that we perform once a year, we have never bothered to get a thorough understanding of rental income. Whatever the situation, we address all of your concerns in this guide to ensure that when you read this guide, you will never have any problems with rental income. 3. As long as the review is not completed, the IT department does not see your income or lease agreements. The rental income you submit to the employer stays with your employer, it never goes to the IT department – unless you ask the company in case of an exam. In practice, it has been observed that people deposit false rental income, even if they do not live in rented housing. To counter this, staff services began to require leases for hra benefits.
The verification process will be increasingly strict day by day, so there is a risk of requesting an HRA waiver by providing any type of false documents. If a person wants to apply for HRA with a false welcome knowing all the risks, he must prepare all the false documents and, as we know, depositing each counterfeit document is not so easy. 1. If there is no control, taxpayers are not very concerned about it. The possibility of control for low wages is very low.