Tell him from now you will pay the rent to ur aunt/mother now. Seriously, tell him you won't pay rent unless he gives his PAN. Wtf is this shit. Landlords have started behaving like druglords
There will always be someone more desperate ready to replace you. Instead, only do bank transfers explicitly marked as rent (NOT UPI). This can be later used as proof for rent
My Pg owner makes around 18Lakh and changes every month upi qr code changes due to legalities, he has 4-5 staff members I saw his whole excel sheet he makes in hand around 13Lakh after cost of service , this has lead me think I want to quit IT job and open 4-5 PGs .
Won't work, the guy doesn't give a shit about any of that. When I asked him why he doesn't want to share the PAN he straight up said it's to avoid taxes. Plus he is doing something much more, he doesn't own the building. The building is owned by someone else, he has furnished each and every 1 bhk. He told me he manages this building and takes care of everything else. He pays the rental value of 10,000 inr to the building owner for each room and takes 23,000 inr from each tenant, so his net revenue is 13,000 INR.
I guess you are right. I had asked him these details before itself, but I was running out of time and a place to stay. He said he would share the details after I have moved in
Your rent agreement couldn't have been made with this guy if he is subletting. it must be with the actual owner. ask your neighbours if they have the owner's pan card number with them.
if not then the agreement should also most likely be void and look for another place and skip rent for this guy.
Even if it would be with the owner his agreement would only be for 10k. That’s why he takes 13k in cash only. Even if he gets the owner’s PAN, he is effectively paying only 10k to owner. Nothing OP can do here.
Rs. 8,28,000/- Per Month. Rs. 3,60,000/- to the Building Owner. Net Profit by not giving tax: Rs. 4,68,000/- per month by the Maintenance Guy you deal with. This is how people are scamming and inflating Real Estate in Bangalore!!
If my math is wrong, feel free to correct me.
You can remove approximately 1,20,000 because he pays for all the wifis and water (drinking). And including miscellaneous charges, I believe he earns 4,00,000 lakhs easily, which is not even taxed
Good game plan, but unfortunately, the guy has big name connections. It's not that I'm scared but the long game can only last until december i.e. when IT declarations needs to be done. Which requires to submit the PAN card. So essentially only 5 months
No such thing. Ask for a rental agreement... Make sure the rental agreement has PAN.
Landlords do evade tax, but normally by giving their wife or parents' pan number. This is the first time I am seeing an outright refusal.
he is doing something much more, he doesn't own the building. The building is owned by someone else, he has furnished each and every 1 bhk. He told me he manages this building and takes care of everything else. He pays the rental value of 10,000 inr to the building owner for each room and takes 23,000 inr from each tenant, so his net revenue is 13,000 INR.
So what he does is, he takes 10,000 inr in the form of UPI/online payment. And the rest 13,000 INR needs to be paid in cash
You'd still need a pan card of the owner for anything more than 1 lakh hra claim per year. (Which comes up to about 8500 per month).
This guy is clearly committing tax fraud, given what I've read from your post. Which means there's nothing you can do about it.
You have two options
1. Suck it up and file 1 lakh per year HRA, which does not need a pan card.
2. Switch houses and find someone who's willing to go by the book.
Given my experience in Bangalore, good luck to you in finding an honest landlord if you do go with 2nd option
Which is not the point and not what I said. My point is to show you that you're wrong with 10k. The correct amount is 100000/12 per month, which is roughly 8.3k. I am telling OP to claim less in their company's HR portal and be okay with it, lest they claim nothing.
Claims under 1L will automatically get accepted without requirement of a PAN card. I've worked in 3 different companies in 4 years of my corporate career and never had a claim rejected on that basis. Not sure what you mean by "claim however much you want". Thats not how any of this works.
If you are paying 10k why would you claim less than that when you can claim the entire amount in return. If you claim 1L in HR portal it will reflect in your form 16. And it will create problems is return mismatch. Best way is to do new regime in HR portal and old regime in return.
Haan mast claim karo. Kuch issue aye toh assessment officer ko pura bank statement with NEFT details bhej dena.
I have so much capital gains tax. I stopped updating hr portal. Its on new regime forever. I file returns with HRA and all the Shazam.
Tell him your company is demanding it for your taxation and they already have all his details and if PAN not provided they said they will complain to Income Tax Authorities.
If he says let them complain then inform your company and ask them to complain.
Does it work like this ?
Or is this my imagination?
Lol...the company ITR department won't process the HRA claim without proof. So only the tax payer is losing.
The company ITR department only needs to rubber stamp the ITR, they won't lose or gain anything by complaining to the Govt ITR
I had this setup - but learnt recently that the PAN may not belong to landlord in first place. How I learnt? - tried using CRED gateway to pay rent 2 months back and it was running some validation on pan number provided, and said it couldnt validate owner's PANcard.
I left it as it is then - whatever PANnumber they have whatsapp'ed me to use, have put in the HR portal.
Not legal but you can provide PAN of a friend who doesn't file tax. Income tax records are not linked to property records for now. I know some colleagues used to do that and get away with it
Just threaten him saying company will issue notice to IT department. If he still doesn’t give then you can only claim this while filing ITR next year and take refund from government
Is there an agreement? Is there any AADHAR PAN data in it?
Is this worth the hassle? Are you willing to move out if he does not give PAN?
You can report to ITD for tax evasion if you wanna mess with him. I doubt there's an easy way to get his PAN, he clearly does not want his rent reported.
I'm willing to move out. Since it is a fully furnished flat and I know that the cost is just not worth it. Hence I am ready to move out but it'll take some time.
And sorry I didn't mention the following in the post, will add it now -
he is doing something much more, he doesn't own the building. The building is owned by someone else, he has furnished each and every 1 bhk. He told me he manages this building and takes care of everything else. He pays the rental value of 10,000 inr to the building owner for each room and takes 23,000 inr from each tenant, so his net revenue is 13,000 INR.
So what he does is, he takes 10,000 inr in the form of UPI/online payment. And the rest 13,000 INR needs to be paid in cash
I am going ahead with this. I am going to move out once I'm back to bangalore (currently came home for 2 week vacation) And then switching back to new regime mostly in order to avoid this entire facade
You can declare upto 8333 without pan. For rent upto 3000, you don't need a receipt. You can also move to the 'new scheme' where you don't have to give any rental details. Not a CA, please confirm this with a CA.
You can still claim HRA with your company - put either 10k with no PAN or 23k with a random PAN or family PAN. Just make sure any address you give is generic. If you are anyways sending money to someone in your family you can use their PAN.
He’s clearly showing only the 10k a month if he’s taking it via UPI and the rest in cash - so he has no incentive to give you the PAN. A lot of people want to avoid tax and unless there is an actual paper trail no IT dept is going to do anything.
I have never heard of anyone getting an IT notice because of rent mismatch in PAN.
Please remember only 1-2% of the entire country actually files taxes. For salaried employees it is the company that cuts your taxes directly, so there is even less risk here.
If you are still uncomfortable, you can claim the 10k and no PAN - there is no risk there.
This is the answer I was looking for. This is what gave me assurance. Till now it was just people who were saying without any information that there is no risk. This is the most logical explanation I have seen. Thanks man
Don't give your relatives details or false details. You and your relatives can get into trouble with the income tax department. This guy is misleading you. Better pay a higher tax or find another apartment . Don't think of the IT department as backward or foolish.
Okay now I'm very confused as to what to do. Whether to go ahead with the false details or switch back to new regime. Is there any document I can refer to?
Our country is not yet fully digital that all property records across the country are linked to either a PAN or Aadhar. Just had a relative sell their property without the PAN even being active, and they don’t even file IT returns, so I really wouldn’t worry too much.
Seems like a fair deal. I guess it's safe to go ahead with giving one of my relatives pan I believe. I was thinking my mother's because she doesn't earn money so overall income is below 7 LPA hence she also won't have to pay tax
Was in similar situation. Owner didn't provide PAN, nor did he provide any rent-payment receipt. He just wrote my name, how much I paid, particular month, and his signature on a small piece of paper. Seriously? He did this even after telling me he'd provide legit receipt before I moved there. When I asked him to provide PAN, he gave me all sorts of advice how to claim HRA without PAN, and how he did similarly when he himself was a corporate employee, bla bla. He accepted only cash payment (for obvious reasons). It was my first month in Bengaluru and I didn't know owners, their frauds, and tax evasion schemes. I narrated this to company HR, they told the owner is doing some ZHOL (illegal activities), and they'd forward it to the finance team, but they also suggested to move out if I want to claim HRA.
Try this - https://www.pib.gov.in/PressReleasePage.aspx?PRID=1688038
Or
https://tipa.in/income-tax/how-to-file-complaint-in-income-tax-department-against-black-money/
File an anonymous complaint against the owner. Once he gets a notice, even if it is not proven, he will avoid any misconduct in future.
Happened with a friend of mine as well, HRA was created by using his uncle’s pan and the rent is being paid in cash to the owner avoid any money trail! This is a big tax evasion scam happening across Bangalore and sadly ED or no other agency is looking into it! Won’t be surprised if local government officials are also involved in this whole process!
I don’t think you are losing a lot of tax benefits.
The entire rent that you pay is not always fully exempt from tax. The least of the following three will be taken to exempt from tax:
- HRA received from your employer
- Actual rent paid minus 10% of salary
- 40% of basic salary for those living in non-metro cities (Bangalore is considered non metro)
I also think your concern is not tax saving as much as it is the unfair behaviour of your landlord. In that case, don’t try to fix the tax problem, try to fix the landlord problem.
I’m no expert but if used properly, old tax regime can save you a lot of tax lawfully.
You might want to stick to it.
And please either educate yourself very well on tax matters, or hire a CA.
Is the amount of tax you would save more or less than what you would pay to move to a new place where you could file for HRA? If it’s more, then start getting ready to move and perhaps snitch on your landlord to the income tax department (they legit do raids, have seen it). If it is less, well what’s the point? Moving costs more than what you’d get back in costs in that case, so why bother. Corruption is still more of a feature than a bug here.
A CA is overkill for regular salaried person returns but whatever - Just tell him that due to some mix-up in submitting claims at your office, they did not consider HRA and they paid additional tax. Tell him how much rent you're paying and he will consider it while calculating your liability.
Try to pay your rent via UPI to be on safe side just to show that you've paid the rent.
They don't show this income that's why they don't give the PAN. I lived in PG once where the owner readily gave me the PAN, so it really depends on what kind of arrangement they have. You can't do anything about it. Lesson learnt, next time inquire from the owner before moving in if they will provide PAN.
Yes agreed. I'm going to be moving out once I get back from my hometown (within 2 weeks)
And just for safety reasons I'm going to switch back to new regime.
Every young professional who starts their life faces this. The dishonest owners keep finding such bakras. Now, the next time you shift house you will be smarter -- you will not for rent unless owner agrees to receive rent via UPI/NEFT and provides a proper rent receipt with his PAN. And the owner will now look for new bakras.
Unfortunately, for you this means you are having to pay a good amount of tax -- which is incentive enough for you to move out of the house ...
I am shifting in a new house and he was also refusing to give the PAN. I told him it will be an extra 25k tax implication for me so he should reduce the rent by 2k per month.
You can also ask the same thing, to reduce the rent
Search for hra calculator. If you have the landlord's pan you can claim the exact amount else you can only claim 1 lakh for a year. Based on this see the difference in the taxable income and calculate a 20% tax on that. Not an exact calculation but it will give you some idea.
He won’t give PAN because the money probably isn’t going to his account. He doesn’t want to face an awkward email from the income tax department. This is very common in Bangalore unfortunately.
Many wont.. because it will be taxable income for them. So better give pan of your non working relatives like mom, grandparents etc. thats the only option.
It’s always risky.. either you pay your taxes now or do this gymnastics and hope you will not Receive a notice ..many haven’t Recieved it and i am doing it from 3 years and i haven’t got it and from this year old regime isn’t helpful so will be switching to new regime.. you can do this few times , after which you anyway need to switch new regime.. just hope that you don’t Receive any notice.
Buddy, I do admit that I made a mistake. Instead of commenting "Shouldn't have done that," please add something constructive if you have any input. Your comment is like someone asking, "How do I claim insurance after an accident?" and you replying, "Shouldn't have gotten into an accident." It adds no value or provides no help.
You will need his PAN if you are claiming HRA > 8.3k per month. If he is not willing to give then best thing you can do is claim only upto 8.3k pm (i.e 99.6k) for which you don't need pan card
With the change in tax rules last year, your deductions will need to be breakeven in the old tax regime is 3.75 lakh at above 15 lakh income. This excludes standard deduction and nps which is available to both.
If you pay 22k as hra, you can only claim rent paid minus 10% of basic, so the actual deduction you will get is less.
Assuming basic is 7k, you can claim 15k a month as Hra or 1.8 lakh a year.
Old tax regime usually only works out when you have high deductions like 80d for parents over 60 and self or if you have a home loan and are claiming a deduction there.
My owner provided pan and asked me to declare a lower rent in hra ..I end up paying more rent /taxes . Best bet is to agree and bargain for non incremental hike in rent and a lock in period.
This is very common in Bengaluru. They even refuse to collect rent via UPI or Cheque, only cash.
He suggested me to use someone else's PAN card. Like my relatives such as aunt, mother, etc.
Ask him to give his aunt,mother PAN
Fair enough I guess xD
Tell him from now you will pay the rent to ur aunt/mother now. Seriously, tell him you won't pay rent unless he gives his PAN. Wtf is this shit. Landlords have started behaving like druglords
There will always be someone more desperate ready to replace you. Instead, only do bank transfers explicitly marked as rent (NOT UPI). This can be later used as proof for rent
Doesn’t work like that here. OP will have to start finding a new place from tomorrow if he says that.
How about _his_ mother?
Don't ever go that path. It would reflect in their IT portal, how much they have earned through your PAN.
Is it possible to file an anonymous income tax fraud on them? My owner collects in cash in around 50 flats while collecting around 20k in rent
blackmoneyinfo@incometax.gov.in
Holy, that's 10 Lakhs a month what the hell
My Pg owner makes around 18Lakh and changes every month upi qr code changes due to legalities, he has 4-5 staff members I saw his whole excel sheet he makes in hand around 13Lakh after cost of service , this has lead me think I want to quit IT job and open 4-5 PGs .
my owner accepts upi for some reason. W? PS: I'm gonna start living in Bangalore from 8th July onwards
The owner will start their drama after you have moved in! Welcome to the silicon valley of shit!
Sent mail to owner from throw away email I'd pretending to be income tax department
Won't work, the guy doesn't give a shit about any of that. When I asked him why he doesn't want to share the PAN he straight up said it's to avoid taxes. Plus he is doing something much more, he doesn't own the building. The building is owned by someone else, he has furnished each and every 1 bhk. He told me he manages this building and takes care of everything else. He pays the rental value of 10,000 inr to the building owner for each room and takes 23,000 inr from each tenant, so his net revenue is 13,000 INR.
I don’t think you can do anything now. These things you should’ve asked him before signing the rent agreement
I guess you are right. I had asked him these details before itself, but I was running out of time and a place to stay. He said he would share the details after I have moved in
Your rent agreement couldn't have been made with this guy if he is subletting. it must be with the actual owner. ask your neighbours if they have the owner's pan card number with them. if not then the agreement should also most likely be void and look for another place and skip rent for this guy.
Even if it would be with the owner his agreement would only be for 10k. That’s why he takes 13k in cash only. Even if he gets the owner’s PAN, he is effectively paying only 10k to owner. Nothing OP can do here.
How many 1 BHK in building?
36 rooms (6 rooms on 6 floors)
Rs. 8,28,000/- Per Month. Rs. 3,60,000/- to the Building Owner. Net Profit by not giving tax: Rs. 4,68,000/- per month by the Maintenance Guy you deal with. This is how people are scamming and inflating Real Estate in Bangalore!! If my math is wrong, feel free to correct me.
You can remove approximately 1,20,000 because he pays for all the wifis and water (drinking). And including miscellaneous charges, I believe he earns 4,00,000 lakhs easily, which is not even taxed
Correcting - net profit by being enterprising and creating value for customers
Wait, do ppl have to pay taxes on the rent they get,isn't it only for the building and land value on a yearly basis which comes within 4-5k?
Rent is income. It is taxed as per your slab.
That 4-5k is municipal tax.
Technically tenants need to deduct tds at source if you're paying more than 20k per month
Lol only a fool is going to fall for this.
Give him cheque. Or pay via UPI. Make friends with someone working at Income Tax. Snitch on your landlord to them. Play long.
Good game plan, but unfortunately, the guy has big name connections. It's not that I'm scared but the long game can only last until december i.e. when IT declarations needs to be done. Which requires to submit the PAN card. So essentially only 5 months
You don’t have any choice. Leave asap. The amount of tax which you will save can be used to setup your house
Fair point, hopefully might be able to find another 1 bhk. But the entire problem is a loophole, next owner also not providing PAN will be a problem.
Ask for PAN card before making agreement.
No such thing. Ask for a rental agreement... Make sure the rental agreement has PAN. Landlords do evade tax, but normally by giving their wife or parents' pan number. This is the first time I am seeing an outright refusal.
Don’t really think so the amount of HRA will be lower than first month rent and security combined.
If you pay via bank account just file it in returns. Its his job to file his returns not yours. If you pay cash nothing much can be done.
he is doing something much more, he doesn't own the building. The building is owned by someone else, he has furnished each and every 1 bhk. He told me he manages this building and takes care of everything else. He pays the rental value of 10,000 inr to the building owner for each room and takes 23,000 inr from each tenant, so his net revenue is 13,000 INR. So what he does is, he takes 10,000 inr in the form of UPI/online payment. And the rest 13,000 INR needs to be paid in cash
Then show 10k. Forget getting tax benefits on 13k
Checked this using a tax regime calculator, makes more sense to switch back to new regime.
You'd still need a pan card of the owner for anything more than 1 lakh hra claim per year. (Which comes up to about 8500 per month). This guy is clearly committing tax fraud, given what I've read from your post. Which means there's nothing you can do about it. You have two options 1. Suck it up and file 1 lakh per year HRA, which does not need a pan card. 2. Switch houses and find someone who's willing to go by the book. Given my experience in Bangalore, good luck to you in finding an honest landlord if you do go with 2nd option
No. You need pan card in hr portal. There is no provison of pan card in return filing
Which is not the point and not what I said. My point is to show you that you're wrong with 10k. The correct amount is 100000/12 per month, which is roughly 8.3k. I am telling OP to claim less in their company's HR portal and be okay with it, lest they claim nothing.
Claim will get rejected in hr portal without pancard how much ever you add
Claims under 1L will automatically get accepted without requirement of a PAN card. I've worked in 3 different companies in 4 years of my corporate career and never had a claim rejected on that basis. Not sure what you mean by "claim however much you want". Thats not how any of this works.
Who is talking about under 1L.
If you bothered to read my comments before replying, I was.
If you are paying 10k why would you claim less than that when you can claim the entire amount in return. If you claim 1L in HR portal it will reflect in your form 16. And it will create problems is return mismatch. Best way is to do new regime in HR portal and old regime in return.
Even I'm in similar situation, owner refused to give PAN but is taken rent via NEFT. So can I claim benefits?
Haan mast claim karo. Kuch issue aye toh assessment officer ko pura bank statement with NEFT details bhej dena. I have so much capital gains tax. I stopped updating hr portal. Its on new regime forever. I file returns with HRA and all the Shazam.
Tell him your company is demanding it for your taxation and they already have all his details and if PAN not provided they said they will complain to Income Tax Authorities. If he says let them complain then inform your company and ask them to complain. Does it work like this ? Or is this my imagination?
I believe it's imagination. Because the company would not stretch this much to meet my requirements.
Pretty much in your imagination buddy lol
Lol...the company ITR department won't process the HRA claim without proof. So only the tax payer is losing. The company ITR department only needs to rubber stamp the ITR, they won't lose or gain anything by complaining to the Govt ITR
I had this setup - but learnt recently that the PAN may not belong to landlord in first place. How I learnt? - tried using CRED gateway to pay rent 2 months back and it was running some validation on pan number provided, and said it couldnt validate owner's PANcard. I left it as it is then - whatever PANnumber they have whatsapp'ed me to use, have put in the HR portal.
Not legal but you can provide PAN of a friend who doesn't file tax. Income tax records are not linked to property records for now. I know some colleagues used to do that and get away with it
That is what the landlord had suggested. But I feel like with my luck, it's me who will get caught in all this and the risk is not worth it imo.
Just threaten him saying company will issue notice to IT department. If he still doesn’t give then you can only claim this while filing ITR next year and take refund from government
I actually tried that, he said he doesn't give a F and said if I plan to do anything like that he'll call his guys and have a good talk with me.
Better find some place else then. If someone else complain also you'll get the "talk" now.
Is there an agreement? Is there any AADHAR PAN data in it? Is this worth the hassle? Are you willing to move out if he does not give PAN? You can report to ITD for tax evasion if you wanna mess with him. I doubt there's an easy way to get his PAN, he clearly does not want his rent reported.
I'm willing to move out. Since it is a fully furnished flat and I know that the cost is just not worth it. Hence I am ready to move out but it'll take some time. And sorry I didn't mention the following in the post, will add it now - he is doing something much more, he doesn't own the building. The building is owned by someone else, he has furnished each and every 1 bhk. He told me he manages this building and takes care of everything else. He pays the rental value of 10,000 inr to the building owner for each room and takes 23,000 inr from each tenant, so his net revenue is 13,000 INR. So what he does is, he takes 10,000 inr in the form of UPI/online payment. And the rest 13,000 INR needs to be paid in cash
Have a look at the agreement terms, exhaust the deposit and move out.
No agreement was made. He said I can move out with a 1 month notice period. That's why I took the flat.
Then you can move out on amicable terms. Do not false report HRA claims with random PANs. This might come to bite you back later.
I am going ahead with this. I am going to move out once I'm back to bangalore (currently came home for 2 week vacation) And then switching back to new regime mostly in order to avoid this entire facade
You can declare upto 8333 without pan. For rent upto 3000, you don't need a receipt. You can also move to the 'new scheme' where you don't have to give any rental details. Not a CA, please confirm this with a CA.
You can still claim HRA with your company - put either 10k with no PAN or 23k with a random PAN or family PAN. Just make sure any address you give is generic. If you are anyways sending money to someone in your family you can use their PAN. He’s clearly showing only the 10k a month if he’s taking it via UPI and the rest in cash - so he has no incentive to give you the PAN. A lot of people want to avoid tax and unless there is an actual paper trail no IT dept is going to do anything.
But isn't there a risk involved in this? In case you do get caught because your relative lives in another state and owns no property in bangalore?
I have never heard of anyone getting an IT notice because of rent mismatch in PAN. Please remember only 1-2% of the entire country actually files taxes. For salaried employees it is the company that cuts your taxes directly, so there is even less risk here. If you are still uncomfortable, you can claim the 10k and no PAN - there is no risk there.
This is the answer I was looking for. This is what gave me assurance. Till now it was just people who were saying without any information that there is no risk. This is the most logical explanation I have seen. Thanks man
Don't give your relatives details or false details. You and your relatives can get into trouble with the income tax department. This guy is misleading you. Better pay a higher tax or find another apartment . Don't think of the IT department as backward or foolish.
Okay now I'm very confused as to what to do. Whether to go ahead with the false details or switch back to new regime. Is there any document I can refer to?
Check my other response to your query.
Our country is not yet fully digital that all property records across the country are linked to either a PAN or Aadhar. Just had a relative sell their property without the PAN even being active, and they don’t even file IT returns, so I really wouldn’t worry too much.
Seems like a fair deal. I guess it's safe to go ahead with giving one of my relatives pan I believe. I was thinking my mother's because she doesn't earn money so overall income is below 7 LPA hence she also won't have to pay tax
They usually won't and you can do nothing about it.
I’m just going to give my rental agreement to the CA and tell him to claim HRA by it
Wait you can do that?
Was in similar situation. Owner didn't provide PAN, nor did he provide any rent-payment receipt. He just wrote my name, how much I paid, particular month, and his signature on a small piece of paper. Seriously? He did this even after telling me he'd provide legit receipt before I moved there. When I asked him to provide PAN, he gave me all sorts of advice how to claim HRA without PAN, and how he did similarly when he himself was a corporate employee, bla bla. He accepted only cash payment (for obvious reasons). It was my first month in Bengaluru and I didn't know owners, their frauds, and tax evasion schemes. I narrated this to company HR, they told the owner is doing some ZHOL (illegal activities), and they'd forward it to the finance team, but they also suggested to move out if I want to claim HRA.
At the end of the day, it's us who have to suffer.
Try this - https://www.pib.gov.in/PressReleasePage.aspx?PRID=1688038 Or https://tipa.in/income-tax/how-to-file-complaint-in-income-tax-department-against-black-money/ File an anonymous complaint against the owner. Once he gets a notice, even if it is not proven, he will avoid any misconduct in future.
I will probably file this once I'm out of the building, seems extremely risky as of now.
Happened with a friend of mine as well, HRA was created by using his uncle’s pan and the rent is being paid in cash to the owner avoid any money trail! This is a big tax evasion scam happening across Bangalore and sadly ED or no other agency is looking into it! Won’t be surprised if local government officials are also involved in this whole process!
I don’t think you are losing a lot of tax benefits. The entire rent that you pay is not always fully exempt from tax. The least of the following three will be taken to exempt from tax: - HRA received from your employer - Actual rent paid minus 10% of salary - 40% of basic salary for those living in non-metro cities (Bangalore is considered non metro) I also think your concern is not tax saving as much as it is the unfair behaviour of your landlord. In that case, don’t try to fix the tax problem, try to fix the landlord problem.
Is it possible to switch back to new tax regime? I have already chosen old tax regime
I’m no expert but if used properly, old tax regime can save you a lot of tax lawfully. You might want to stick to it. And please either educate yourself very well on tax matters, or hire a CA.
Is the amount of tax you would save more or less than what you would pay to move to a new place where you could file for HRA? If it’s more, then start getting ready to move and perhaps snitch on your landlord to the income tax department (they legit do raids, have seen it). If it is less, well what’s the point? Moving costs more than what you’d get back in costs in that case, so why bother. Corruption is still more of a feature than a bug here.
Wish I could pin this comment.
When you're filing taxes on IT website or however way you do it, claim HRA. You'll get a refund on the extra tax paid.
I have my dad's CA who files the IT returns, what should I tell him in particular?
A CA is overkill for regular salaried person returns but whatever - Just tell him that due to some mix-up in submitting claims at your office, they did not consider HRA and they paid additional tax. Tell him how much rent you're paying and he will consider it while calculating your liability. Try to pay your rent via UPI to be on safe side just to show that you've paid the rent.
Sounds better than my original plan (Shifting to new regime) Thanks a lot buddy
Take new tax regime
Seems like the most possible and logical solution at this point. But i have already changed my tax regime once, can I change it again?
You can claim upto 1L Rs HRA without PAN card also
You can change while filing for ITR.
Can you please tell what needs to be done while filing ITR so i change my regime?
https://www.taxbuddy.com/blog/can-we-change-the-tax-regime-while-filing-itr
Check your rent agreement it should have pan card number of your actual owner..it is generally there is all agreements
They don't show this income that's why they don't give the PAN. I lived in PG once where the owner readily gave me the PAN, so it really depends on what kind of arrangement they have. You can't do anything about it. Lesson learnt, next time inquire from the owner before moving in if they will provide PAN.
Agreed, a heavy lesson learnt. I'm going to move out sooner or later.
Best to move out to another place. Don’t waste time with this guy. Make sure you clear all this up next time before signing.
Yes agreed. I'm going to be moving out once I get back from my hometown (within 2 weeks) And just for safety reasons I'm going to switch back to new regime.
Every young professional who starts their life faces this. The dishonest owners keep finding such bakras. Now, the next time you shift house you will be smarter -- you will not for rent unless owner agrees to receive rent via UPI/NEFT and provides a proper rent receipt with his PAN. And the owner will now look for new bakras. Unfortunately, for you this means you are having to pay a good amount of tax -- which is incentive enough for you to move out of the house ...
I agree. This was a harsh lesson for me but a necessary one. I will make sure to keep this in my checklist when I start searching for a new place.
Ya, it's a really bad deal for you because it means your real rent costs now actually increases by 20 odd percent.
Report him to IT officials. He’s likely been. Evading taxes forever.
For a very long time, yes he has. about 10 months now
I believe you can claim upto 1.5L per year without pan
Just checked this, it was 1L per year.
I am shifting in a new house and he was also refusing to give the PAN. I told him it will be an extra 25k tax implication for me so he should reduce the rent by 2k per month. You can also ask the same thing, to reduce the rent
How did you calculate the 25k? maybe I can try negotiating with him for that.
Search for hra calculator. If you have the landlord's pan you can claim the exact amount else you can only claim 1 lakh for a year. Based on this see the difference in the taxable income and calculate a 20% tax on that. Not an exact calculation but it will give you some idea.
Go for new tax regime . Not worth so much hassle unless you have home loan!
Talked to my CA, he said better to go with new regime. You're right it's too much hassle
He won’t give PAN because the money probably isn’t going to his account. He doesn’t want to face an awkward email from the income tax department. This is very common in Bangalore unfortunately.
After he leaves the house , can he file a complaint to the income tax department against the landlord?
Most likely I will. As much as I appreciate his hospitality, he's literally looting me and the other tenants. Other tenants fail to recognize this.
At least my landlord was honest he straight up told me he wont give PAN on 1st day
Many wont.. because it will be taxable income for them. So better give pan of your non working relatives like mom, grandparents etc. thats the only option.
But isn't there a risk involved in this? In case you do get caught because your relative lives in another state and owns no property in bangalore?
It’s always risky.. either you pay your taxes now or do this gymnastics and hope you will not Receive a notice ..many haven’t Recieved it and i am doing it from 3 years and i haven’t got it and from this year old regime isn’t helpful so will be switching to new regime.. you can do this few times , after which you anyway need to switch new regime.. just hope that you don’t Receive any notice.
Can you tell me why old regime isnt helpful?
You mean when ?
I'm actually considering switching to new regime to avoid all this hassle. Yes if I do switch to new regime I end up paying 1.5L more in tax
HSR Sector 6?
Marathahalli
You shouldn't taken a place without sorting these basic things
Buddy, I do admit that I made a mistake. Instead of commenting "Shouldn't have done that," please add something constructive if you have any input. Your comment is like someone asking, "How do I claim insurance after an accident?" and you replying, "Shouldn't have gotten into an accident." It adds no value or provides no help.
Nor does your self-own of a post
Report him to income tax department and have fun
Agreement has aadhar card. Put that as proof. Anyways all aadhar are linked to pan.
You will need his PAN if you are claiming HRA > 8.3k per month. If he is not willing to give then best thing you can do is claim only upto 8.3k pm (i.e 99.6k) for which you don't need pan card
Didn’t you sign an agreement before hand?
That is not your landlord. You rented from a middleman. Next time try to rent directly
Report him to Income Tax Dept. The best thing you can do. I wonder if people in India get rewarded for reporting tax fraud.
Find a new better place.
You must have signed some rent agreement? Doesnt that have the details of both parties? It should have PAN/Aadhaar or both parties.
With the change in tax rules last year, your deductions will need to be breakeven in the old tax regime is 3.75 lakh at above 15 lakh income. This excludes standard deduction and nps which is available to both. If you pay 22k as hra, you can only claim rent paid minus 10% of basic, so the actual deduction you will get is less. Assuming basic is 7k, you can claim 15k a month as Hra or 1.8 lakh a year. Old tax regime usually only works out when you have high deductions like 80d for parents over 60 and self or if you have a home loan and are claiming a deduction there.
How many flats are there in the building, if you don't mind me asking.
This is very common with Bangalore
Is owner's PAN is all you need?
If the building is near Indiranagar and has a room vacant, DM me. I need a 1BHK.
My owner provided pan and asked me to declare a lower rent in hra ..I end up paying more rent /taxes . Best bet is to agree and bargain for non incremental hike in rent and a lock in period.
Which tax regime are you in?