Income Tax News: Unlocking Your HRA Benefits! Common ITR Claim Errors and How to Avoid Them

Income Tax News: While claiming HRA as a tax benefit, it is very essential to avoid some common mistakes so that it runs smoothly and saves the penalty for the same. Here are the major mistakes to be observed:

Inadequate Documentation

This is one of the most prevalent errors that all of us commit—failing to maintain adequate documentation regarding payment of rent and its receipts. Original rent receipts, along with the lease agreement and other pieces of evidence, should be kept to back one's claim.

Presenting Fake Rent Receipts

It is one of the serious offenses to furnish fake rent receipts. The consequences, in those cases, could be pretty undesirable—ranging from penalties to the unwarranted attention of taxmen.

Claim of HRA on Self-Owned Property

Some people, at times, mistakenly claim the HRA facility while staying in a self-owned property. HRA cannot be claimed in case the accommo­dation is self-owned; instead, it can only be claimed when one pays rent to a landlord.

Wrong PAN Details of Landlord

If the PAN details of the landlord are not furnished while making rent payments in excess of Rs 1 lakh per annum, the same can result in rejection of HRA claims. Get correct PAN details from your landlord and furnish it.

Mismatch in Aadhar and PAN Details

If, under the new tax regime, details of the landlord, such as PAN or Aadhaar, fail to get furnished, then there will be disallowance of exemption on HRA.

Wrong Computation of HRA Exemption

Generally, salaried persons compute HRA exemption as the least of actual HRA received, 50% or 40% in non-metros of basic salary, and rent paid minus 10 percent of salary. The above-stated calculation must be computed without any discrepancy.

Proper understanding and following of the same may significantly enhance the chances of a successful HRA claim, besides compliance with income tax provisions. Records must hence be properly kept and maintained, and a tax consultant showing doubt in any respect regarding the process of claiming an HRA should be consulted.