What is a Rent Receipt?
A rent receipt is a document provided by a landlord to a tenant that confirms payment of rent. It contains information such as the amount of rent paid, the date of payment, and the period for which the payment was made. Rent receipts serve as proof of payment and are important for record-keeping purposes for both the landlord and tenant. If you're eligible for tax exemption under HRA (House Rent Allowance), you need to submit your rent receipt as a proof.
Why Do You Need a House Rent Receipt?
Here's why you need rent receipt:
- Serves as proof that the tenant has paid the landlord's rent, providing a detailed record of the transaction
- Helps claim HRA exemption under Section 10 (13A) of the I-T Act
- Rent receipts assist landlords and tenants in keeping accurate rent payment records, which can be important for budgeting, financial planning, and tax purposes
- Serves as legal protection can be used as proof of payment in the event of a dispute or legal issue with rent payments
- Ensures that the renter is in accordance with the conditions of the rental agreement, which may include documentation of rent payment
Rent Receipt Format
A typical rent receipt has a structure similar to the one given below:
- Tenant name
- Landlord name
- Rent paid
- Rental period
- House address
- Landlord's signature
- Landlord's PAN number
What is the Tax Benefit on Monthly Rent Paid?
A salaried employee living in a rented house can avail HRA exemption under Section 10(13a) of the I-T Act provided the company has HRA component as a part of salary. Self-employed individuals can avail HRA tax deduction under Section 80GG. Your HRA tax exemption limit is the minimum of the following:
- Actual HRA received
- 50% of salary if living in metro cities, or 40% for non-metro cities
- Excess of rent paid annually over 10% of annual salary
How to Create and Download Rent Receipts?
Using the Rent Receipt Generator tool, aAll you need to do is enter the following details:
- Your name email and house address
- Landlord's name and PAN number
- Monthly rent
- Rent collected on (Date)
- Payment mode - cheque or netbanking
- The month or period for which the rent is paid
Once done, click on 'Generate Receipt' and download the house rent receipt pdf in a minute.
Important Points to Remember While Generating Rent Receipt
Here are a few factors that you need to keep in mind before generating receipt for house rent:
- Make rent transactions online rather than offline for a transparent record of transactions
- Ensure that you have a valid rent agreement in place that includes all relevant details such as monthly rent, time period of the agreement, and utility bill arrangements, especially in shared accommodations
- Request a rent receipt with a revenue stamp to ensure its validity for tax purposes, and share it with your employer to claim House Rent Allowance (HRA) exemption for monthly rent paid above ₹3,000
- If the annual rent payment exceeds Rs.1 lakh, provide your landlord's PAN (Permanent Account Number) to your employer to avail the full benefit of HRA exemption.
- If the PAN is unavailable, the landlord must provide a declaration and 'Form 60' filled and submitted to the employer
- In case you pay a higher amount than what is mentioned in the rent agreement, tax exemption is calculated based on the rent receipt provided by you to your employer.
What is HRA?HRA stands for House Rent Allowance. This is the amount an employer pays an employee to cover the cost of rent. paid as part of your salary. The HRA exemption is a tax credit given to the amount a worker pays for her housing in one year.
Do I need to provide any proof to claim HRA?In order to claim tax exemption on House Rent Allowance (HRA), it is necessary to provide proof of rent paid during the financial year. This can be done by submitting rental agreements or rent receipts received from the landlord as valid documentation.
What if my landlord doesn't have a PAN card?To avail House Rent Allowance (HRA) exemption, employers often require employees to provide the PAN (Permanent Account Number) of their landlord or a declaration (applicable only if the rent paid exceeds Rs.1 lakh). In case the PAN is not provided, the employer may not grant the HRA exemption
Do I need a lease agreement with my landlord?Yes, The contract is a crucial document that serves as evidence to establish the lessor as the legitimate owner of the property. It also outlines the rights and responsibilities of both parties involved in the lease.
Can I claim HRA on my own?Any salaried employee can claim HRA exemption under Section 10 (13A) of the I-T Act. For self-employed individuals who don’t have an HRA component can claim HRA exemption under Section 80GG of the ITA.
If I change my job, do I need to share my old rent receipts with the new company?Not necessarily, It's important to note that with each job change, the salary structure may undergo modifications, including allowances such as House Rent Allowance (HRA). Therefore, it's crucial to remember to claim HRA exemption from all employers during the respective financial years. To claim the exemption, one simply needs to submit rent receipts as proof, especially if they reside in a rented apartment.
How do I get my rent receipt?You can use our house rent receipt tool to generate a rent receipt in a few minutes. Make sure to enter correct details to get accurate results.
Can I claim HRA exemption without rent receipt?You can claim HRA exemption without rent receipt if your HRA is less than ₹3,000. However, if your HRA is above ₹3,000, you must submit your rent receipt to claim exemption.