Online Rent Receipt Generator
You must submit a rent receipt if you live on rent and your salary package includes house rent allowance (HRA). It works as proof of your expense and allows you to claim tax deductions allowed as per the Income Tax Act, 1961 in India.
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What is a Rent Receipt?
A rent receipt is a document to record the payment of rent by the tenant to a landlord. It is issued by the landlord and can be used for legal or taxation purposes.
A rent receipt includes important information such as the rent amount, date of payment received, and medium of transaction. This helps both parties keep physical records of the payments. It is an essential document to resolve any rent payment disputes that may arise. Especially if you are a tenant paying your rent through cash or cheque must maintain their payment records. Also, if you are eligible for a tax exemption under HRA you must maintain rent receipts for the same.
Why Do You Need a Rent Receipt?
A rent receipt is physical proof of rent paid. It works as a legal document endorsing the transfer of money from a tenant to a landlord. It is also mandatory to submit a rent receipt to claim a House rent allowance (HRA). You must provide a rent receipt as evidence of the payment of rent to your employer. Employers provide the HRA tax benefit after verifying the rent receipts.
Who Needs to Submit a Rent Receipt and How?
Most companies offer House Rent Allowance (HRA) to employees as a component of their CTC (cost-to-company). It helps them meet the cost of living on rent if the company is not providing them accommodation. HRA is not just an allowance but a tax-saving avenue. In order to avail of the benefit of HRA, you must submit a rent receipt to the HR department of your organization. You may not do it on a monthly basis but quarterly, half-yearly, or annual basis as required by your employer. The HR team must verify whether you have actually paid rent before allowing you to claim HRA tax exemption.
Recommended Tool: HRA Calculator
Rent Receipt Format
As explained earlier, if you are a salaried employee and living on rent a rent receipt is mandatory. You must submit it to your employer to establish your eligibility for HRA exemption. The receipt is proof of your rental expenses. In accordance with the Income Tax Act, 1961 it is mandatory to do so for availing the tax benefit of HRA.
A valid rent receipt has the following components:
- Tenant Name
- Landlord Name
- Rent Paid
- Rental Period
- House Address
- Signature of Landlord
- PAN of the landlord (if your annual rent exceeds Rs. 1,00,000)
How To Download Rent Receipt using Scripbox?
A landlord must issue a rent receipt whenever he receives rent from the tenant. A duly signed receipt confirms the payment of rent by the tenant. But if you are paying rent and do not receive a receipt from your landlord you can easily generate one. It can be done easily using the Scripbox Rent Receipt Generator.
- Step 1: Firstly, click on Scripbox Rent Receipt Generator
- Step 2: Secondly, enter details on the form such as your name, landlord’s name, and PAN. You must enter the correct rent amount paid in a month.
- Step 3: Thirdly, you should provide the correct address of accommodation. Enter the duration for which rent is paid by selecting the date. Select your payment mode from the dropdown.
- Step 4: Fourthly, select the date on which you paid the rent. You can select to generate the rent receipt for a month or a consolidated one for the entire duration.
- Step 5: Fifthly, click on get receipt to generate your digital rent receipt. Take a print of the receipt for getting a sign and stamp from your landlord.
How To Claim HRA?
To claim your HRA exemptions you must submit Rent Receipts to your employer. You can do it in just 4 simple steps:
1. Firstly, generate a rent receipt online and print it; or fill a copy offline
2. Secondly, enter details such as the amount paid as rent, your name, landlord’s name, and address
3. Thirdly, get the filled copy of the receipt stamped and signed by your landlord
4. Finally, submit the completed rent receipt to your HR.
What is the Tax Benefit of Paying a Rent?
Salaried professionals living in a rented house can avail of an HRA exemption. They can save tax under Section 10(13A) of the Income Tax Act. Self-employed professionals can avail of tax deductions under Section 80GG against rent paid.
The HRA exempted amount can be calculated through the following formula:
- Actual HRA paid by the employer
- The rent paid minus 10% of Basic Salary
- 50% of Basic Salary if you live in a metro city. 40% of Basic Salary if you live in a non-metro city.
The least of the above is the HRA exemption. Basic Salary includes dearness allowance.
Recommended Tool: Income Tax Calculator
Points To Remember While Paying Rent
- You must have a valid rent agreement with your landlord. The rent agreement must have all relevant details including your monthly rent, agreement tenure, and the clause regarding payment of any utility bills.
- If you are living in shared accommodation, then details of all tenants must be provided. It includes the number of tenants, the ratio of rent distribution, and the division of utility bills.
- It is advisable to pay rent online instead of paying it in cash. This helps you seamlessly keep track of the transactions.
- You must collect a rent receipt every time rent is paid. It is mandatory to submit rent receipts to your employer. Then only you can claim HRA exemption for your monthly rent if paid above Rs. 3,000.
- If your rent payment exceeds Rs. 1 lakh in a year, then you must provide the PAN of your landlord. Upon submission of the same to your employer, you can avail of the full benefit of HRA exemption.
- In case the PAN of the landlord is not available then the landlord must give a declaration. You must discuss these details before finalizing your rented accommodation. In case the actual rent you pay is higher than what is mentioned on your rent agreement. The tax exemption will be calculated on the basis of the rent receipt submitted by you.
You can also explore our article on What is Salary Slip?
Frequently Asked Questions
HRA stands for House Rent Allowance. It is the amount paid by employers to their employees to provide for rented accommodation costs. It is paid as a component of salary. HRA exemption is the tax concession given to employees against the amount they pay towards accommodation in a year. The calculation of the HRA exemption amount will be based on only the basic salary and dearness allowance (DA).
In case you do not get HRA from your employer then you can still claim the tax deduction under Section 80GG.
You don’t need to submit rent receipts every month, it can be done quarterly, semi-annually, or annually. It is advisable to submit your rent receipts every quarter.
PAN of the landlord must be furnished if the annual rent paid exceeds Rs. 1,00,000. It is mandatory to submit the PAN of the landlord to your employer if you want to claim HRA exemption. If your landlord does not have a PAN, you must get a declaration from the landlord. It is mandatory as per circular No. 8/2013 dated 10 October 2013. The declaration should include his/her name and complete address
You must have a lease agreement that captures all details of your rental arrangement. It must include the address of the accommodation, period of the lease, and amount to be paid as rent. You may be asked to submit a copy of it however, in most cases only a rent receipt is required.