To save income tax, do you give fake rent receipts? You may be in for a shock

FP: April 5, 2017 If you are using faking rent receipts to save on income tax, be careful next time you submit those forged vouchers. The income tax officials can get after you to show more proof and put you in trouble. According to a report in The Economic Times, the Income Tax Appellate Tribunal has recently ruled that the assessing officer can ask for more documents to prove that you are indeed residing in the place for which the receipts are submitted. The officer, if he suspects the rent receipts are fake, can ask for the leave and licence agreement, letter to the housing society informing about the renting out of the residence, electricity bill, water bill, etc, says the report. As of now, to avail of the benefit, one needs to just submit the rent receipts and in case the rent is above Rs 1 lakh per annum, the PAN of the owner of the residence, too. But with this ruling, this is going to change and the burden of proof will be on the employee who submits the rent receipts. The ruling by the Mumbai tax tribunal is likely to set a precedent and the salaried class is likely to come under the scanner on this count, the report said. Employees are allowed to get tax exemption on house rent allowance under Section 10(13A) of the Income Tax Act. Under this section, the employee can get exemption on actual HRA received or 50 percent of the basic salary for metros (40 percent for other cities) or an amount equal to actual rent paid minus 10 percent of the basic salary, whichever is lower.