What is the Rent Receipt Format?
After getting a job in a metropolitan city, people move there to live.
You will be asked by your HR and account department for the rent receipt
to help you avail HRA allowance.
As an employee, to apply for a House rent allowance (HRA), it is mandatory to provide it as evidence to the employer. After verifying the rent receipt, your employer may provide deductions and allowances.
A rent receipt is evidence of your HRA allowance; most employees ask for 3-4 month rent receipts. You can quickly generate the rent receipt format on Vyapar billing software, which automatically comes with all the required details.
What to Include in a Rent Receipt Format?
You should prepare the rent receipt carefully as it works
as a piece of evidence for your Home rent allowances from
The details given down below are added carefully to your rent receipt:
- Tenant's Name.
- Amount to be paid.
- Landlord Name.
- Rental period.
- Date of payment.
- The address of the rented house.
- Signature of landlord or manager.
Other essential details on rent receipt:
- You should add the PAN (it doesn't have any compulsion to be included just in case your annual rent payment does not exceed 1 Lakh)
- You can include the revenue stamp (where payment of margin exceeds INR 5,000 in cash)
- Method of payment (cash, credit card, money order, cashier's check)
- You can include details of services and other essential fees in your receipt (convenience fees, security deposits, utilities etc.)
Why is a Rent Receipt Necessary For Claiming the HRA Benefit?
Employees must generate the rent receipt to employers to get the House
rent allowance (HRA). In case your rental payment exceeds more than
INR 3,000 a month. In such circumstances, you can ask for a House rent
allowance by using a rent receipt.
It is also mandatory these days to provide the PAN details of the landlord in your rent receipt. If he does not have the PAN card, you can take the undertaking form, grab form 60 and get it signed by your landlord.
In many cases, employees who pay the higher rent, more than the amount mentioned in the rent receipt, end up paying the excess for the rented house. In such cases, employers may calculate the HRA based on the amount mentioned in your rent receipt by brushing aside the excess amount.
Suppose a person lives with their parents and pays rent to them. It is mandatory to collect the rent receipt along with a rent agreement and rent receipt. It will be provided to your employer in the rent receipt. In case parents are eligible for ITR, in these circumstances, they are obliged to show the rental income in their ITR.
In case the employee owns the house and lives in another city. In such cases, the employee becomes eligible for the HRA benefit with the help of the rent receipt. You may also claim the ITR tax deduction benefits against the interest and principal payment on the home loan.
What are the Advantages of Claiming a HRA While Staying with Family?
There are certain benefits given down below while you are living with your family:
Guaranteed Tax Savings as a Family:
You may live in your parent's house and pay a particular rent.
You can get your Home rent allowances by showing your rent
receipt to your employer, having all the vital details.
It enables you and your family to claim exemption on HRA by submitting all the essential details in your rent receipt. You can easily create the rent receipt formats in all three formats (PDF, Word and Excel) available on the Vyapar app.
Get a Good Deal on Your Parent's Property Tax Deduction:
While staying with your parents, you are eligible for HRA under
specific rules and regulations. Not only this, but rent receipt
enables you to receive certain benefits on their property tax.
It allows a 30 per cent tax deduction on property tax.
It enables your parents to save a certain amount on their property tax. It will be a win-win situation for your parents and yourself simultaneously. You have to appropriately fill in all the essential details of legal rent receipts and property tax deduction papers.
Claim HRA While Paying EMI on the Home Loan:
A rent receipt allows you to claim the HRA tax benefit while paying
an EMI on the home loan. You can claim HRA if your permanent residence
is not in your city of employment. In case your family does not come
in any tax slab, you may save a significant amount of tax as a family.
If you own a house in the same city of employment, you must produce evidence through legal paperwork to claim your HRA tax exemption. You can easily create your rent receipt using the Vyapar rent receipt maker app. You will get a significant tax exemption if you are older than 60.
Which Documents are Required to Claim the HRA While Staying with Parents?
Certain documents given down below are essential for claiming your HRA while staying with your parents:
- You may ask to submit the rent receipt and rent agreement between you and your parents. In many situations, your employer may ask you to submit a copy of the rental agreement. They may also ask for a rent receipt to allow you an HRA exemption.
- You cannot enter into a single rent agreement with your parents.
- You can prepare your rent receipt format in all three formats (PDF, Word and Excel) available on Vyapar and submit it to your payroll/ HR department. You can easily download and share on digital platforms like Whatsapp and Gmail.
- You should adequately organize and keep your rent receipt on your android and the personal computer to allow you an HRA.
Essential Points to Remember for an HRA Deduction
- For HRA calculation in India, cities like Delhi, Mumbai, Kolkata and Chennai are considered metropolitan cities. You may not come under the metro cities in other cities you may be employed.
- In case your employees may pay your HRA as a part of your salary. In such conditions, you may not be eligible to claim the HRA. You will have to live in the rented accommodation as the original condition to claim HRA.
- The entire HRA paid, you may not be allowed to claim it for a tax exemption. The lowest annual rent paid minus 10 percent of basic salary, you can only claim HRA from the employer, and 40-50 percent of salary, depending on where you stay, can only be claimed.
- You may be eligible to claim HRA even if you are living with your parents. You should produce proof of rent payment, such as the rental receipt or transaction of your bank account. But the only condition over it is your parents need to show it in their ITR.
- In case you pay rent to your spouse. You will not be eligible to ask for an HRA deduction.
- Suppose your rent exceeds more than Rs. 100,000 annually. In such circumstances, your landlord's PAN copy is required to submit along with the rent receipt document. In some cases, landlords don't hold the PAN card, so that they will ask for the signed declaration.
Why Vyapar App is a better alternative to Rent Receipt Format?
Vyapar rent receipt maker app allows you to manage single
and chain stores simultaneously. You don't need to worry
about registration as it will enable you to operate both
registered and unregistered business platforms.
It allows you to access your data on single and multiple devices simultaneously. It provides you with non-GST and GST invoices, bills etc. You can carry on your transaction seamlessly by using various modes of payment.
You can create multiple companies and up to five real-time firms within a company on Vyapar. The app gears you with a business dashboard to have real-time updates on your smartphones and Personal computer.
Vyapar rent receipt maker app brings you all accounting and billing features at a very affordable annual package compared to other platforms. It provides many features that play an essential role in your day-to-day business work, free of charge.
Seamless Party Management:
Vyapar allows you to manage the party's
email, phone number, registered address, shipping address,
GST number etc. You can customize your rent receipt formats
in all three formats on Vyapar.
You can add additional fields to manage PAN, registration, DOB etc. You can also add and assign party groups in the rent receipt maker app. Vyapar is trusted by over 5 million small business owners for their business activities.
Vyapar enables you to manage party opening balance and, after that, receivables and payables balance. You can manage your business activities in both online and offline modes simultaneously.
Using the app, you will get the payment reminder to receivable parties. It allows you to perform party-to-party payment transfers using multiple online and offline payment modes.
Get Essential Reports:
Vyapar rent receipt maker app allows you multiple transaction
reports (Sale, purchase, payment, other income, expense). You
will receive a party report and bank statement on your respective
Other essential business reports include the day book, sale aging, and balance sheet. Vyapar is simple to use by every age group of people. Its features and tools are so simple and easy to acclimatize.
You will get the profit and loss report and item wise profit and loss report on your devices. Vyapar billing software makes your business platform smoother and faster, making your service business a lucrative platform for your customers.
You can easily create a rent receipt format on Vyapar. It automatically comes with all the essential details required to make a rent receipt. It lets you share your rent receipt with your employees on WhatsApp and Gmail.
Use Multiple Themes:
Vyapar enables you to get multiple themes for your rent
receipt in all three formats PDF, Word and Excel. It contains
two thermal invoice themes and twelve regular invoice themes.
Using these themes, you can easily enhance the quality and beauty of your business platform. It will make your business more inclusive. Vyapar is an excellent rent receipt generator for your HRA allowances.
Vyapar allows you multiple theme options for thermal and regular printers. The best thing is that it is free of cost, but it helps you create a rent receipt online, which helps your family with essential tax deductions.
All themes are fully customisable as per user requirements. Users can enable/disable the information as per their choice, details they want to print over their invoice using the regular printer.
List Tax and Discounts:
Vyapar rent receipt maker app allows you item and transaction-wise
tax and discount options. You can create a rent receipt and pay
rent using the free invoicing software Vyapar.
The item you added on Vyapar is inclusive and exclusive of taxes. It enables you to add and modify tax-rate and tax-group simultaneously. It is easy to operate and helps build a trusted and verified business platform.
You can perform the management discount by using the Vyapar billing software. Vyapar enables you to customize your rent receipt in your preferred format. You can share the rent receipt with your employees on digital platforms like Gmail and WhatsApp.
Vyapar allows you to track the status of each invoice. You can set the invoice due date easily for your customers on Vyapar. Mesmerizing features and affordable prices of Vyapar provide you with quality for your business.
Download Rent Receipt Format
Frequently Asked Questions(FAQS)
What is the Rent Receipt?
As an employee, to apply for a House rent allowance (HRA),
it is mandatory to provide it as evidence to the employer;
after verifying the rent receipt, your employer may provide
deductions and allowances.
A rent receipt is evidence of your allowance; most employees ask for 3-4 month rent receipts.
Can I Ask For HRA Without a Rent Receipt?
If the employee receives HRA allowances above Rs. 3000 per month,
it is compulsory to provide a Rent receipt to the employer as proof
of claiming HRA.
Even if your HRA is lower than Rs. 3000, try to keep rent receipts with yourself if the Income Tax Officer asks for them later.
How Much Rent can I Show in My Income Tax Return?
Fifty per cent of the basic salary, including dearness allowance, for those living in metro cities and 40 per cent in case you are resident in a non-metro city. Actual house rent is paid less than 10% of the basic salary, including a dearness allowance.
Which Stamp is Asked For the Rent Receipt?
Just like every other part of the country, a revenue stamp must be attached to rent receipts in case cash payment is more than Rs. 5000 per receipt. Moreover, a revenue stamp is not required if a rent transaction is carried out through a cheque.
How do I Format a Rent Receipt?
You can create the rent receipt in all three formats, PDF, Word and Excel, available on Vyapar billing software. You can customize your rent receipt as per your requirement on Vyapar, which comes at affordable prices compared to other platforms.
Do I Need a Stamp on the Rent Receipt?
It must affix a revenue stamp on rent receipts if cash payment exceeds Rs. 5000 per receipt. A revenue stamp is not required if rent is paid through cheque.
How do I Get an HRA Allowance Receipt?
To avail HRA claim for an income tax deduction, follow the steps listed below:
- Create free rent receipts on Vyapar.
- Avoid the last-minute hassle of arranging rent receipts.
- Fill in the essential details.
- Print the receipt in your preferred rent receipt format.
- Get the rent receipt signed by your landlord.
- Lastly, please submit it to your company's HR department.
How Much Rent is Tax-Free in India as Per GOI?
A person is eligible to pay tax on rental income if the Gross Annual Value (GAV) of a property is less than Rs 2.5 lakh. However, if rental income is a primary source of income, then a person might have to pay the RTI.