Whenever a payment is made, a receipt is given, as it is the only proof available for the transfer of money/goods. When renting a premise, for residential or commercial, it is important to ensure a rent receipt is received from the landlord for all payments made by the tenant, which we will be discussing in this guide.
Rent Receipts act as a confirmation of payment made as rent by a tenant to an owner/Landlord. Some employees are required to produce rent receipts to claim HRA exemption. If an individual pays more than Rs. 1 lakh as rent, then he/she must obtain the landlord’s PAN and report about the same to the employer. In some states rent receipts are given to tenants on payment itself.
Rent receipts generally do not have a specific standard format. The basics should contain the following details:
There is no need of revenue stamp unless the payment made in cash per receipt exceeds Rs. 5,000. An Assessing Officer (A.O.) may ask for it to validate the details. The rough format for rent receipt can be as following:
RECEIVED from [Mr./Ms.] [Tenant Name],
the sum of Rs. [Amount] (Rupees [Amount in words]), on account of rent of [Property Address Line 1], [Address Line 2], [City], [State]
[Pin-code], inclusive of all taxes, for the month of [Month, Year] by way of [cash or cheque or demand draft].
Arrears: [NIL or amount in numbers and words, if applicable]
Date: [Date of receipt of money]
Place: [ City, State ] (Landlord)
Again, as Rent Receipt format there is no specified regulations regarding what to include in rent receipts. Here are some details that should be there in general:
Some of the benefits of keeping rental receipts ae as following:
1. Is rent receipt mandatory for claiming HRA?
If an employee receives HRA more than Rs. 3,000, then it is mandatory to provide rent receipts as an evidence for claiming HRA.
2. Do I need to produce rent receipt for every month?
Generally employer asks for rent receipts for 3-4 months. You can also provide it month wise varying from employer to employer.
3. Is it necessary to affix revenue stamp on rent receipt?
Revenue stamp is necessary and especially when cash payment is more than Rs. 5000, per receipt. If rent is paid through cheque then revenue stamp is not needed.
|Mode of Payment||Revenue Stamp Required|
|Cash, up-to 5000 per receipt||No|
|Cash, more than 5000 per receipt||Yes|
4. What evidences are required for claiming HRA?
The only evidence required for claiming HRA is Rent receipt issued by landlord.
5. Is PAN of landlord required for claiming HRA?
PAN of landlord is compulsory only if rent surpasses Rs.8333/- per month (Rs.100000/- annually). In case landlord does not have PAN, declaration of the same is required.