Rental invoices are records that prove that the pay cheque has passed from the tenants hands to the homeowner hands. It is helpful information for claiming the Home Wage Arrangement (HRA) subsidy from the employer. The employee will furnish the company with legitimate rent invoices. However, several incidents have recently been documented in which the employee falsifies the rent receipt in order to claim the HRA benefit. It is unlawful to falsify a rent receipt, and it can result in serious legal consequences, as we shall detail later in the essay. First, let us investigate why individuals falsify rent receipts and how they do it.
How can someone impersonate a mortgage invoice?
As per the IT Act of 1961, HRA paid by the company is not chargeable, according to a qualifying cap calculated based on the employee basic income, HRA, and real rent paid. As a result, HRA greatly reduces employees effective revenue outgo. As a consequence, some people, although living in their own houses, fabricate false rent invoices in order to obtain the HRA advantage.
Also see: The Benefits of a Home Lease Receipt When Claiming HRA Tax Incentive
The issue now is, how did they fabricate the lease invoice? They construct a lease statement using internet payment statement producers or by typing out the rent data in a lease reception style, then signature it in the name of a fictitious owner to pass it off as an authentic certificate. Employees who reside in their own houses may send money to close family members such as a brother or sister and get a lease statement from them in order to receive the HRA advantage. It is critical to prove that the lease agreement occurred; just receiving the rent invoice from a sibling does not establish lease behavior.
For example, if the rent payment exceeds Rs 1 lakh in a year, the landlord(s) PAN number must be included on the lease invoice. Many times, persons who fabricate rent invoices do not include the PAN number, or they include the incorrect PAN number, which is discovered during the authentication process.
Workers may be required to present a lease statement in order to collect HRA benefits, particularly whether they own a house in almost the same city.
The penalty for falsifying a lease statement might be harsh, and employees could face serious consequences. Let us investigate the numerous penalties for falsifying a lease statement.
Point 2. Penalties for falsifying paying invoices:
● The severity of the penalty for forging a lease invoice varies depending on the cost of money and the kind of fraud.
● The following are the various consequences for manufacturing forged paying invoices:
● If employment has been under, the Income Tax Department can apply a penalty of up to 200 percent of the amount payable with the under income.
● Inadequate earnings might result in a 50% fine.
● In the event of a data discrepancy, the IT Department may issue a notification requesting legitimate papers, commence inspection, or revoke the HRA exemption.
Point 3. Income Tax Department Corroboration
Income Tax Department Corroboration
The IT Department can validate the rent receipt in a variety of methods,
● Absence of a rent agreement when claiming HRA by producing a rent receipt
● The landlord(s) PAN number is incorrect or fictitious as shown on the rent receipt.
● The employer failed to declare the HRA benefit on Form 16.
● In the lack of acceptable supporting documentation, the employee claimed HRA against a rent receipt given by a close relative.
● When the employee receives the notification from IT Department, he or she must answer within the time frame indicated.
If the IT Department requests necessary documentation, it should be delivered as soon as possible to prove the allegation.
Point 4. Things to remember in order to avoid prosecution for falsifying a rent receipt
Here are some crucial considerations to remember in order to avoid accusations linked to forged rent receipts:
● Obtain a proper agreement with the landlord.
● Try to pay your rent online or by check.
● If the pay cheque exceeds Rs 1 lakh in a year, obtain the landlord(s) PAN information from the rent receipt.
● The renter should retain a record of all electricity bills payable by themselves.
● If the landlord does not have a PAN, a statement should be submitted together with a properly completed Form 60.
Q1. May I receive HRA if We live at home with my parents and pay their rent?
A. Yes, you can claim the HRA if you reside in your parents or a relative(s) house and pay rent to them. However, it is critical to obtain the rent receipt in the specified format from them. Rent receipts, rent agreements, a society letter of habitation as a tenant, transaction evidence, and so on are some key documented evidences that frequently play a vital part in the validity of a rental transaction.
Q2. What exactly is a legitimate lease invoice?
A. A legitimate rent receipt includes information such as the tenant name, rent amount, property address, duration of rent, landlord signature, PAN data (if necessary), manner of payment, and a government seal if the lease is paid in cash and exceeds Rs 5,000.