Rent Receipts/Slips: What is It, Format & How to Fill House Rent Receipt?

House Rent Allowance (HRA) is an allowance (part of CTC) given by your employer to help you cover the cost of living in a rented accommodation. However, due to a lack of experience or understanding of how the salary structure works, many are not fully aware of how to utilize this allowance.

If you live on rent and have made rent payments, you can claim a deduction on the House Rent Allowance at the time of filing your return. Rent receipts play a crucial role in enabling salaried individuals to claim deductions when filing their income tax returns. Read more in the below excerpt.

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What is Rent Receipt and Why is It Required?

A rent receipt is a document provided by a landlord to a tenant acknowledging the payment of rent. It typically includes details such as the amount paid, the date of payment, the duration covered by the payment (e.g., month or week), the name of the tenant, and the signature or stamp of the landlord or property manager. Rent receipts serve as proof of payment and are important for both landlords and tenants to maintain accurate financial records.

To claim a House rent allowance (HRA), it is necessary to provide evidence of the payment of the rent to the employer; rent receipts work as evidence. The employer can provide deductions and allowances after verifying the same. The HRA allowance is based on the rent receipts and will be calculated accordingly.

Claim HRA deduction and minimize your tax burden by filing ITR. File ITR for FY 2023-24 (AY 2024-25) today.

What amount of HRA is tax-free?

You can claim exemption on some part of your HRA as per Section 10 (13A) of the IT Act. The deduction you can claim is the minimum of:

What is the format of Rent Receipt?

The transaction of rent happens between tenant & landlord on a certain date each month for a premise having an address and rent of xxx amount for the period of a month

So, for each rent receipt to be valid, the following mandatory elements must be present in a rent receipt:

Other elements that are part of rent receipts:

PAN of the Landlord(not mandatory; mention only if annual rent exceeds Rs.1,00,000 in a year)

Revenue Stamp(where an amount exceeding Rs. 5000 is paid in cash)

  1. Method of payment (cash, credit card, money order, cashier’s check)
  2. Services or other fees included in the payment (e.g., utilities, security deposits, convenience fees)

How to generate Rent Receipt online?

You can use Tax2win’s Free Rent Receipt Generator to instantly generate your online rent receipts at any time.

Here is how you can generate rent receipts through Tax2win:

Tax2win rent receipt generator

rented house address

Print Receipts

Print Receipts

Is it necessary to affix a revenue stamp on rent receipt?

A revenue stamp is required to be affixed on rent receipts if cash payment is more than Rs. 5000 per receipt. If rent is paid through cheque or online transfer, then a revenue stamp is not required.

You can easily understand it from the given table

Mode of Payment Whether revenue stamp is required
Cash, upto 5000 per receipt No
Cash, more than 5000 per receipt Yes
Cheque or online transfer No

Revenue stamps can be obtained from nearby post offices, or you can obtain the same by stationery shops, amazon, and local vendors.

Why am I required to submit rent receipts to the HR Department?

As per the Income Tax law of our country, every person who pays a salary is required to deduct tax at source(TDS), deposit with the government, and then pay the remaining amount to the employee. During this process, if any employee makes a tax-saving expenditure, then the person responsible for deducting tax has to consider and give the benefit of that expenditure and then deduct the tax on the net amount.

Practically, it has been observed that people submit fake rent receipts, even when they are not living in rented accommodation. So, to counter this, HR departments have started asking for rent agreements for giving HRA benefits.

Looking at the importance of rent agreements, here are 5 things to check in your rent agreement

Smart tactics to be followed at the time of drafting rent agreements-

Important Things to Note about the Rent Receipt

What are fake rent receipts?

Fake rent receipts are forged or falsified documents that falsely claim to represent payments made for rent. They are typically used for fraudulent purposes, such as:

While giving investment proof to the Income Tax Department, some people submit fake rent agreements and rent receipts to save more tax. If you are also thinking of doing something like this. Beware! As the Income Tax Department has started sending notices (IT Notices) to those who claim tax deduction by submitting fake rent receipts since last year.

Penalty for Fake Rent Receipts

The penalty for submitting fake rent receipts can vary depending on the jurisdiction and the severity of the offense. Civil Penalties: This could involve being sued by the landlord or property management company for damages, including the unpaid rent or any financial losses incurred due to the fraudulent activity.

Received an Income Tax Notice for incorrect information added while filing the ITR; contact the tax2win experts for help responding to the ITD.

How does the payment of rent help you in saving taxes?

There can be three situations when you are paying rent for the rented accommodation -

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Condition A:
Calculation of exempted HRA (Rent Paid - 1,80,000/-):-

A, B, C whichever is lower is to be selected as exempted HRA.

Condition B :
You can still claim the tax benefit of HRA at the time of filing the return, as HRA is a part of your CTC. The only notional loss you will have to bear is more amount of TDS that will be deducted during the year.

Condition C :
If HRA is not a part of your CTC, don’t be disheartened. You can still claim the deduction of rent paid at the time of filing the return u/s 80GG but upto Rs. 60,000 only.

How to claim an HRA exemption at the time of filing the ITR?

Here is a step-by-step process for claiming HRA exemption-

Step 1:Calculate the HRA exemption amount as discussed above. To avoid the hassle, you can also use our HRA exemption calculator to find out the amount of exempt HRA at https://tax2win.in/tax-tools/hra-calculator

Step 2:Deduct the amount of exempt HRA from the Income Chargeable under the head salary [column 6 of your Form 16, Part B].

Step 3:Enter the amount calculated in Step 2 under Income From Salary /Pension. For instance, your Gross Salary from Form 16 is 8,00,000, and you have an HRA exemption of Rs. 1,20,000, So instead of showing Salary income Rs. 8,00,000/- in ITR1 fill it as 6,80,000/-.

How to ensure HRA does not get rejected

To ensure that your House Rent Allowance (HRA) claim is not rejected, you should take the following steps and provide the necessary supporting documents:

We hope this article helped you learn a lot about rent receipts and their significance in claiming HRA exemption. If you have already generated your rent receipts using tax2win’s rent receipt generator, it's time to file your income tax return with tax2win and get a seamless ITR filing experience.