Key Points
HRA tax fraud: The investigation began when authorities stumbled upon purported rent receipts totaling approximately Rs 1 crore under an individual's PAN..
Subsequent inquiry revealed that the individual had not actually received the rent attributed to them.ET.
The income tax department has uncovered a scheme involving fraudulent use of Permanent Account Numbers (PAN) by individuals to falsely claim house rent allowance (HRA), despite not being tenants, stated a Times of India (ToI) news report..
Where rent is paid to the parent, the rent should be paid through cheque or by way of electronic transfer (and not through cash) to demonstrate the genuineness of the transaction and that parent too needs to report that rental income in his or her return," said Kuldip Kumar, partner at Mainstay Tax Advisors, told Times of India...
To be eligible for tax exemption on HRA, the employee must furnish documentary evidence of rent payment, such as rent receipts or rental agreement, to the employer..
