Tax experts say that an employee can still claim tax benefits under HRA in his/her tax return. "The requirement for furnishing PAN of landlord is only to one's employer only. However, once a person is to file his/her income tax return, there is no requirement to furnish the PAN of landlord," says Sandeep Sehgal, director of tax and regulatory at Ashok Maheshwary & Associates LLP.
Even if the company may not allow HRA exemption to the employee, due to non-availability of PAN or a declaration by the landlord of not having PAN, still the employee has the option to claim so while filing his/her income tax return, he says.
(Also Read: Fake Rent Receipts For HRA Tax Benefit Will Be Harder To Push Now)
Mr Sehgal however says that it could attract scrutiny from tax authorities. "The tax authorities can examine the cases to verify the genuineness of the claim made by the employee," he says.
To substantiate the claim, the employee needs to keep a record of the rent agreement/lease deed, rent receipts, intimation to the society for the occupancy, etc, says Mr Sehgal. Also, it is advisable to ensure that the payments are made through bank as cash transactions may not be considered genuine, he adds.