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Everything You Need to Know About Rent Receipts

Last Update Date : April 29, 2019
Estimated Read Time: 4 min

Rent Receipts

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.

What is a Rent Receipt?

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 Receipt Format

Rent receipts generally do not have a specific standard format. The basics should contain the following details:

  • Landlord’s name
  • Rent amount
  • Address of the rented place
  • Landlord’s PAN details and
  • Duration for which rent is received.

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)

Do’s and Don’ts  Of Rental Receipts

Rental Receipts Do’s

  1. Provide rental receipts if/as required by law in your country or state.
  2. Keep each receipt for your records in a safe place.
  3. Use a rent receipt template to help ensure all required and necessary information is complete and accurate.
  4. Immediately request a copy of your rental receipt once payment is made.

Rental Receipts Don’ts

  1. Landlord – Provide rental receipts before the payment is made.
  2. Landlord – Fail to sign and/or include company’s official stamp.
  3. Landlord – Ignore the remaining balance due when providing a receipt for periodic payments.
  4. Accept rental receipts from unauthorized parties.
  5. Forget to request additional items that are included in your rental payment be itemized to avoid disputes (e.g. utilities, cable, etc.).
  6. Wait to have any errors or inaccuracies corrected.

Information to Include

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:

  • Date of Payment
  • Amount of Payment
  • Name of Landlord
  • Signature of landlord or manager
  • Tenant’s Name
  • Tenant’s Address
  • Rental Period

Benefits of Rental Receipts

Some of the benefits of keeping rental receipts ae as following:

  • Having rental receipts acts as confirmation of the transaction that happened and can be further used to claim the tax credit easily in case an additional document is needed.
  • Sometimes while going through the tenant application, landlord sometimes looks for the positive payment history i.e. rental receipts paid on time.
  • It can also be used for resolving disputes or misunderstanding or any inconsistency regarding rental payment.

Frequently Asked questions

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 PaymentRevenue Stamp Required
Cash, up-to 5000 per receiptNo
Cash, more than 5000 per receiptYes

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.

How Can H&R block Help You?

To ensure you avail of the maximum tax savings available to you, such as HRA exemptions and rental receipts, to reduce your tax liability, enlist the aid of the experts at H&R Block India.

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CA Shreya Oturkar
Shreya is a tax advisor at H&R Block (India) with intensive experience in SME taxation and audit. She holds an advanced post graduate qualification in accounting and is highly skilled in financial analysis and reporting. Apart from her professional achievements, Shreya is a talented artist with a flair for free-hand sketching!

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