How to Claim HRA Without Rent Receipts: Complete Guide

Introduction

House Rent Allowance (HRA) is a valuable tax exemption for salaried individuals, but many lose this benefit due to lack of proper documentation. This comprehensive guide covers:

1. 7 legal ways to claim HRA without rent receipts
2. TDS (Tax Deducted at Source) rules for rent above ₹50,000/month
3. Free downloadable affidavit template
4. How to handle landlord PAN requirements
5. Common audit triggers and how to avoid them

---

Part 1: HRA Exemption Basics (2024 Rules)

How HRA Exemption is Calculated

The exempt amount is the lowest of these three:

1. Actual HRA received from your employer
2. 50% of basic salary (for metro cities) or 40% (non-metro)
3. Rent paid minus 10% of basic salary

Example:

• Basic salary: ₹60,000/month (₹7.2 lakh/year)
• HRA received: ₹30,000/month
• Rent paid: ₹35,000/month (Mumbai)
• Calculation:
  • Actual HRA: ₹3.6 lakh
  • 50% of salary: ₹3.6 lakh
  • Rent – 10% of salary: ₹4.2 lakh – ₹72,000 = ₹3.48 lakh
• Exempt HRA: ₹3.48 lakh (lowest of three)

---

Part 2: 7 Legal Ways to Claim HRA Without Rent Receipts

1. Bank Transfer Proof

• How it works: Show consistent rent payments via NEFT/UPI/cheque.
• Requirements:
  • Minimum 6 months of transaction history
  • Transaction remarks should mention “rent”
• Best for: Tech-savvy tenants with cooperative landlords

2. Registered Rent Agreement

• Why it works: A registered agreement is legally valid as rent proof.
• Key details to include:
  • Property address and rental amount
  • Tenure (ideally 11 months or more)
  • Landlord PAN (if rent exceeds ₹1 lakh/year)

3. Landlord Affidavit (Free Template)

• When to use: Landlord refuses to give receipts but agrees to sign an affidavit.
• What it should include:
  • Landlord’s name, address, and PAN (if applicable)
  • Confirmation of tenancy and rent amount
  • Notarization (₹100-200 at local notary)

4. Utility Bills as Proof of Residence

• Accepted documents:
  • Electricity bill in your name
  • Gas connection or broadband bill
• Limitation: Only proves occupancy, not rent amount. Combine with bank statements.

5. Employer Declaration

• Process: Submit a self-declaration to HR with supporting documents.
• Note: Some companies require additional verification.

6. Form 60 for Landlords Without PAN

• When required: Rent exceeds ₹1 lakh/year but landlord has no PAN.
• How to file: Submit to employer along with rent agreement.

7. Property Tax Receipts

• Secondary proof: Shows landlord owns the property.
• Combine with: Bank transfers or affidavit.

---

Part 3: TDS on Rent Above ₹50,000/Month (Section 194-IB)

Who Needs to Deduct TDS?

• Tenants paying rent above ₹50,000/month must deduct 5% TDS.
• Exception: No TDS if landlord provides PAN and rent is for personal use.

How to Deduct and Deposit TDS

1. Register on TRACES (TDS Reconciliation Analysis and Correction Enabling System).
2. Deduct 5% from each rent payment.
3. Deposit TDS by 30th of next month using Challan 26QC.
4. File Form 26QC quarterly (due dates: July 31, Oct 31, Jan 31, May 31).
5. Issue Form 16C to landlord (downloadable from TRACES).

Penalty for Non-Compliance:

• Late payment: 1.5% monthly interest
• Late filing: ₹200/day (max ₹1 lakh)

Landlord PAN Requirement

• Mandatory: If annual rent exceeds ₹1 lakh.
• No PAN?: Tenant must deduct 20% TDS (higher rate).

---

Part 4: Common HRA Audit Triggers & How to Avoid Them

Red Flag	How to Avoid
Rent > 50% of salary	Justify with location (e.g., Mumbai high rents)
No landlord PAN	Use Form 60 or deduct 20% TDS
Inconsistent payments	Maintain regular bank transfers
Claiming HRA while owning a home	Disclose property details in ITR

---

Pro Tip: Keep all documents for 6 years in case of IT scrutiny.

---

Frequently Asked Questions (FAQs)

Q1. Can I claim HRA if living with parents?
Yes, but you need:

• Notarized affidavit from parents
• Proof of their property ownership

Q2. What if my landlord won’t provide PAN?

• Deduct 20% TDS if rent > ₹50,000/month
• Submit Form 60 if rent < ₹1 lakh/year

Q3. Is rent receipt mandatory for HRA?
No! Bank statements + rent agreement are sufficient.

---

Conclusion

Claiming HRA without rent receipts is 100% legal if you use alternative proofs like bank transfers, rent agreements, or affidavits. For high-value rentals (>₹50,000/month), comply with TDS rules to avoid penalties.