The House Rent Allowance (HRA) is integral to specific salaried professionals and their taxpaying journey. When it comes to tax planning and money-saving strategies for rental householders, the HRA tends
to be one of the most commonly deployed money components on paper. As is known, a portion of the HRA received from an employer qualifies for tax relaxation, according to Section 10(13A) of the Income Tax Act.
This partial relaxation depends on the individual’s salary bracket, rent paid during a financial year and other caveats. But HRA still has a massive implication on employees currently living in rented accommodation. By following the rules and processes carefully, it can be a useful strategic tool to reduce such employees’ net taxable income.
CA On HRA’s Tax Implications
According to the Income Tax Act, if a salaried individual’s annual rent stands below Rs 36,000 over a year (i.e. lower than Rs 3,000 a month), they can claim HRA without submitting a rent receipt or issuing their landlord’s PAN card details. At the point of filing the taxes and ITRs, if your rental expenditure is found to exceed the 36,000 threshold, these documents are necessary to claim tax relaxation on HRA.
This documentation process, however, doesn’t denote a legal agreement for claiming HRA but merely acts as a proof filing to assert that the rent has indeed been paid, stressed tax expert CA Ruchita Vaghani. The proof of payment of rent may include rent receipts, bank statements, UPI transfers, cheques or NEFT records.
🏠Claim HRA Without Rent Agreement 👇
Tax Planning Part – 2
Can You Claim House Rent Without Rent Agreement?:
➡️Many salaried people claim HRA in ITR without having any rent agreement.
But is it allowed? 🤔
Let’s decode the rules clearly 🧵👇1. Is Rent Agreement Mandatory?: -…
— CA Ruchita Vaghani (@R_N_Vaghani) January 13, 2026
If an employee’s annual rent expenditure goes past Rs 1 lakh, they must provide the PAN of the landlord to the employer. Provision is available in the rules as per the Income Tax Act for scenarios where the landlord refuses to provide their PAN. In such cases, the tenant must submit Form 10BA and explain the non-availability.
More On HRA
India’s Income Tax Act and tax laws also cater to the rarest of rare scenarios of a salaried individual paying a rental expense to their parents. For tax relaxation in such a case, the rent must still be documented through proper banking channels, with parents also declaring this as a rental income in their ITR papers. It goes without saying that attempts at artificial arrangements in such cases attract tax scrutiny from the authorities.
Even at proper registration of HRA documents, though, merely a green signal from an employer doesn’t make one immune to tax liabilities. While a company may offer the employee a tick on their HRA claims based on the declarations during a financial year, the Income Tax Department still requires proper proof for rental expenditures, including rent receipts and digital payment evidence. Unlike cash payments, these are easy to audit and defend or verify against a claim.
