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The assets tax administration now has acceptable acumen to assert on affidavit from the tax payer assuming that he is absolutely a 18-carat tenant, blockage in the acreage in question.

A salaried agent accepting ‘house hire allowance’ from the employer could escape advantageous tax on at atomic 60% of this bulk by breeding adulterated hire receipt.

However, according to a contempo attorneys ruling, the assessing administrator can now appeal affidavit — such as leave and licence agreement, letter to the apartment branch association allegorical about the tenancy, electricity bill, baptize bill etc. — in acceptance a lower taxable assets as computed by a salaried employee.

“The ITAT (Income Tax Appellate Tribunal) cardinal has now laid bottomward the belief for the assessing administrator to accede the affirmation of a salaried agent and if all-important catechism its justification. This will put the onus on the salaried chic to chase the rules in availing the tax rebate,” said Dilip Lakhani, chief tax advisor, Deloitte Haskins & Sells LLP.

Understandably, none of the appropriate abstracts are accessible with salaried advisers appointment affected hire receipts. There may not be any absolute hire abode from the being as he may be blockage in his ancestors home and accession a cancellation active by his father. Even if a being is a 18-carat tenant, the bulk mentioned in the cancellation may be added than what’s paid. This will not affectation a botheration if the being accepting the hire is alfresco the tax net. There are several instances area a being may be blockage alone but claiming to pay hire to a about owning addition acreage in the aforementioned city; or, one of affiliate of the ancestors claiming a accommodation affirmation answer while addition appointment a apocryphal hire cancellation to balk tax.

Given the boundless convenance of advantageous tax on alone a baby allotment of HRA, it’s cryptic how far tax admiral would go in ytic such claims and pinning bottomward salaried employees.

However, ITAT Mumbai’s accommodation to bang bottomward the HRA absolution affirmation of a salaried alone for hire paid to her mother could set a precedent. “Technology and stricter advertisement arrangement may accomplish it easier for the (income tax) department. For instance, there was a time back abounding never agitated to pay tax on absorption becoming from coffer anchored deposits. Today, it’s about impossible. In case of HRA exemption, the assessing administrator may crosscheck whether the abode mentioned in the ITR anatomy is the aforementioned as the acreage on which hire is paid,” said a tax officer.

The Attorneys cardinal comes a few months afterwards the government’s accommodation to cap the accident on acreage bought with adopted money. Till now, a being advantageous an absorption of, say, Rs 3 lakh on a accommodation (he took to buy the property) and earning Rs 1.2 lakh as hire could appearance the aberration of Rs 1.8 lakh as ‘loss’ and set it off adjoin bacon assets to pay lower tax.

In the aftermost Union account it was laid bottomward that such losses for an alone tax payer cannot beat Rs 2 lakh.

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