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How to Properly Format a Rental Receipt for Income Tax Purposes

House rent allowance (HRA) is typically a part of an employee’s salary. This salary component is taxable under income tax laws in India even though tax deduction to a certain limit is offered.

Is providing rent receipt mandatory to claim HRA exemption?

Yes, according to the Income Tax Act, “though for purposes of grant of house rent allowance, a rent receipt is necessary. Under Section 10(13A) that the employee should have actually incurred the expenditure on rent”.

“For purposes of deduction of tax, the disbursing officer should ensure that the employee concerned has in fact incurred the expenditure on rent. The payment of rent should be verified through rent receipts in the cases of all employees,” a circular issued by the income tax department says.

Download Rent receipt format as attached

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Sample Format of Rental Receipt For reference

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