Rent paid in cash is not illegal, but this one mistake could cost salaried tenants their HRA benefit
Eshita Gain
How much of your HRA is exempt from tax?
HRA received from your employer
Actual rent paid minus 10% of salary
50% of basic salary for those living in metro cities and 40% of basic salary for those living in non-metro cities
How much cash payment is allowed?
Why are cash payments problematic?
How to claim HRA if rent was paid in cash?
Obtain a rent receipt each time cash rent is paid, and make sure it includes the landlord's name, the property address, the month for which rent is paid, and the amount and mode of payment.
Have a rent agreement in place, and also collect signed and dated rent receipts for each month.
Keep documentation showing cash withdrawals, if available, but a withdrawal request alone does not prove that the rent was paid.
If the annual rent exceeds ₹1 lakh, the tenant is usually required to provide the landlord’s PAN to claim HRA.
What happens if the landlord doesn't declare rental income in their ITR
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