Beware! Claiming False HRA While Filing ITR Could Cost You THIS Much: Check Here | Personal Finance News

It’s important to note that you must reside in a rented house to qualify for HRA exemption under Section 10(13A). Individuals who do not receive HRA such as those who are self-employed can claim a deduction for their Section 80GG. However, taxpayers who live in their own house are not eligible for the HRA exemption benefit. (Also Read: Top Stocks On D-Street Today: Uno Minda, Tata Technologies And PNB Housing Among 7 Stocks Grab Spotlight)

Correctly claiming HRA can lead to valuable tax savings. Here’s how you can maximise your tax benefits when filing your taxes:

How is the exemption on HRA calculated?

The exemption on HRA is calculated based on the lowest of the following:

– Actual HRA received. (Also Read: Do You Know What Is The Salary Of These Top 5 Leaders? From Modi To Biden, Here’s How Much They Earn)

– 50% of salary (for those residing in metro cities) or 40% of salary (for non-metro residents).

– Rent paid minus 10% of the salary.

What are the documents needed to claim HRA?

– Rent receipts with acknowledgments from the landlord, especially if the rent exceeds Rs 1 lakh annually, and the landlord’s PAN details.

– Rental agreement: A formal rental agreement that supports your claim.

What are the penalties for making false HRA claims?

Making false HRA claims can result in penalties. If you underreported your income you may face a penalty of 50 per cent of the tax owed. Further, you could be penalised up to three times the amount of tax sought to be evaded.