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Relief for taxpayers on HRA claims! Income Tax Department clarifies no special drive to reopen mismatch cases
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HRA claims relief: The Central Board of Direct Taxes (CBDT) has clarified that there is no special drive to reopen cases related to House Rent Allowance (HRA) claims. The income tax department stated that there is no ongoing special drive to review mismatch cases. Concerns have emerged about potential retrospective taxation and reopening cases related to HRA claims.
However, the Income Tax Department has assured taxpayers that these concerns are unfounded. Instances of information mismatch have been identified, prompting the department to notify taxpayers to rectify any discrepancies. The department emphasized that concerns about retrospective taxation and reopening cases on HRA matters are baseless.
“At the outset, it is stated that any apprehensions about retrospective taxation on these matters and re-opening of cases on issues pertaining to HRA claims is completely baseless,” the tax department has said according to an ET report.
Also Read | Understanding HRA exemption rules & benefits: Saving tax on rent allowance – know eligibility, calculation, documents required & more
Data analysis was conducted in select high-value cases to scrutinize rent payment discrepancies during the fiscal year 2020-21. This process was limited and did not involve a widespread reopening of cases. There were cases of mismatch between rent payment claims by employees and the rent received by landlords.
Also Read | New Vs Old Tax Regime: How income of even Rs 10 lakh can be tax-free under old tax regime
Taxpayers had time till March 31, 2024, to update returns for the relevant assessment year.
The primary aim of the verification exercise was to address information mismatches for the fiscal year 2020-21 without affecting other cases. The income tax department reiterated that there is no large-scale drive to reopen cases, specifically related to HRA claims.
House Rent Allowance (HRA) is a key part of salary income, eligible for tax exemptions. Employees in rented accommodations can claim these exemptions by providing valid rent receipts.
However, the Income Tax Department has assured taxpayers that these concerns are unfounded. Instances of information mismatch have been identified, prompting the department to notify taxpayers to rectify any discrepancies. The department emphasized that concerns about retrospective taxation and reopening cases on HRA matters are baseless.
“At the outset, it is stated that any apprehensions about retrospective taxation on these matters and re-opening of cases on issues pertaining to HRA claims is completely baseless,” the tax department has said according to an ET report.
Also Read | Understanding HRA exemption rules & benefits: Saving tax on rent allowance – know eligibility, calculation, documents required & more
Data analysis was conducted in select high-value cases to scrutinize rent payment discrepancies during the fiscal year 2020-21. This process was limited and did not involve a widespread reopening of cases. There were cases of mismatch between rent payment claims by employees and the rent received by landlords.
Also Read | New Vs Old Tax Regime: How income of even Rs 10 lakh can be tax-free under old tax regime
Taxpayers had time till March 31, 2024, to update returns for the relevant assessment year.
The primary aim of the verification exercise was to address information mismatches for the fiscal year 2020-21 without affecting other cases. The income tax department reiterated that there is no large-scale drive to reopen cases, specifically related to HRA claims.
House Rent Allowance (HRA) is a key part of salary income, eligible for tax exemptions. Employees in rented accommodations can claim these exemptions by providing valid rent receipts.
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