PAN of Landlord is a must if your total annual rent paid exceeds Rs. one Lakhs during the financial year. If rent is equal or less than one lakh rupees then you need not provide PAN details of your landlord to your employer.
As per recent notification issued by CBDT, to claim HRA exemption employees are required to compulsorily provide PAN details of their landlord if they are paying house rent of more than Rs. 100000 per year (i.e. Rs. 8, 333.34 per month from April to March).
Based on this notification, if you are not providing landlord pan details then HRA exemption can not be claimed in cases where rent paid for the year is more than Rs.100000. To claim HRA, your Landlord’s PAN and rent receipt collected from the landlord are to be submitted to employer.
In absence of a PAN card, landlord has to provide a self declaration stating his name and complete address. A valid identification proof of your landlord needs to be attached along with his/her declaration.
Declaration from landlord should specify that he does not have a PAN.
If house rent paid to landlord is equal to or less than Rs. 100000 then you are not required to collect PAN details of landlord. Only the rent receipts will be sufficient to claim HRA exemption.
Your employer may ask you for the rent agreement in addition to rent receipt and pan details of landlord. If your employer asked for rent agreement then it can be provided with PAN details of landlord in it.
If landlord is unwilling to provide PAN card self declaration as required for claiming HRA exemption then you have to forgo your HRA deduction.
With the rent receipt of landlord and rent agreement, you need to claim your income tax refund while filling your Income Tax return.
In such cases, we suggest you to pay your rent by cheque or account transfer to your landlord. By paying your rent through a bank account it will be easier for you to prove that you have actually paid rent.
You can also drop emails to your landlord’s email ID or letters for asking his PAN. This will help you if your landlord does not provide you PAN details and you are required to claim refund for the excess tax deducted on your HRA.
You can collect landlord’s PAN details at the time of making agreement with your landlord or before entering the house. By collecting PAN details at the time of making agreement you will not be facing these kinds of problems at the year end.
Earlier the limit of collecting landlord’s PAN details was Rs. 200000 per year. Recently on 10th October 2013 a new circular has been issued by CBDT where the limit has been reduced to Rs. 100000 per year.
Declaration for Not Having PAN card – You can download this Self Declaration format to be provided by landlord for not having PAN card. Till date, no specific format has been prescribed for this declaration. You can change this format as per your requirements. Good Luck!