ClearTax, an e-filing income tax return portal, recently launched a service for automated generation of rent receipts that individuals can use to claim house rent allowance (HRA). This facility helps create monthly rent receipts for a year. The firm is offering this service free of cost. You can take printouts of the receipts and get them signed by the house owner. The company claims that within four days of launching the product, 100,000 receipts were generated. Here is how the feature works.
How does it work?
Log on to ClearTax’s rent generator web page, https://cleartax.in/save/rent. Key in your monthly rent amount and the house address. Once this is submitted, you need to provide your name, email address, house owner’s name and Permanent Account Number (PAN), and the period for which you need the rent receipts. Then click on ‘Generate’, after which you will be taken to the page with the monthly rent receipts for the date range entered.
The rent receipts are generated as in the following format: Received sum of INR (amount) from (your name) towards the rent of property located at (address) for the period from (dates).
The receipt number as well as the date on which it was generated is given on the receipt. The rent receipts are generated as on the last day of every month. For instance, the receipt for March 2015 would have the date 31 March 2015.
The receipt also has space at the bottom for the house owner’s signature. Apart from taking printouts of the receipts, you will also get an email with the rent receipts. The whole process takes about two minutes. Do keep in mind that the receipts can be generated for only 12 months at a time.
Mint Money take
The Rent Receipt Generator is useful for those claiming HRA. However, two more features could be added to it.
First, the house owner’s PAN is mentioned as optional, while tax rules state that it is mandatory to provide this information if annual rent is above Rs.1 lakh or monthly rent is over Rs.8,333. The software could be enhanced to deduce this, and mandatorily ask for the PAN if rent amount is more than Rs.1 lakh. Or, it could allow for users to print a declaration by the house owner if her PAN is not available.
The second feature that could be added is allowing the user to enter the mode through which the rent was paid, and the rent receipt should contain this information. This is because a revenue stamp is required for receipts if the rent is paid by cash and is over Rs.5,000. The house owner has to sign across the revenue stamp affixed on the rent receipt. If rent is not paid by cash, cheque details or bank statements (in case of online funds transfer) might need to be submitted along with the rent receipt. A provision could be made to include these payment details on the receipt. The generator could also inform users that receipts are not required if the monthly rent paid is below Rs.3,000.
Also, note that it is sufficient to provide one month’s receipt as proof, unless your employer requires you to do otherwise.