There are so many people working as professionals but have no idea on how Rental Agreement Payslip can help them. It is necessary to understand the persistence of rent vouchers or payslips or how to correctly employ them to get a tax deduction. Presently, submitting the rent payslip to the Human Resources Dept of a company has become a normal ritual for the employees, but no one bothers to go deep and understand what the real power of your rent receipt is.
Do not get scared, in this article, you will get an idea of how you can use your rent payslip to get a tax deduction.
What is a rent receipt?
It is an extremely relevant question for employees. One must know the importance of rent receipts in terms of reasoning and its business. Rent payslip is proof that the tenant has paid the landlord and is regular. It is given by the owner upon collecting the rent from the tenant with his signature. Upon receiving the rent receipt, you must maintain them with the records that are important. Rent vouchers can be utilised for legal matters along with eligible tax benefits.
What is the actual benefit of rent agreement payslip?
If you see a Rent Agreement Sample, you can understand how the outline is made and how does a rent payslip looks like. There are several private companies that offer house rent allowance (HRA). They offer HRA to employees for matching the cost of dwelling in the rented place. HRA stands to be the most essential tax-saving promenades as you do not have to pay taxes for the entire expense of HRA.
These are the three avenues that have tax exemptions
- Original HRA received
- Rent paid less than 10 % of Wages
- Rent paid less than 40% of Wages, in the case of cities like Delhi, Mumbai, Kolkata, and Chennai, it is 50%.
Therefore if you want to enjoy the advantages of HRA, the human resource department of a company has to verify if you rent is paid in real, to get the HRA exemption.
Rental Agreement Payslip is Essential for HRA claims
There are two categories devised here for an easy understanding.
- For employees receiving HRA for more than Rs. 3000 each month, it is imperative for the employee to submit the payslip as proof to claim the HRA later.
- In case, if any employee has HRA less than Rs. 3000, then it is advised to maintain them for the purpose of Income Tax.
Why must you submit rental agreements payslip to the employer?
According to the laws of income tax, each nation giving out salary has to deduct tax at source, provide it to the governing body, and pay the residual amount to the employee. Meanwhile, if any employee is indulging in a tax saving expenditure, then the employer is supposed to offer benefits for the particular expenditure and then subtract the tax for the take-home value.
Substantially, it has been noted that employees involve in fraudulent practices and submit fake payslips even when they are not living in a rented home. Therefore, to combat this problem, the HR departments have now come up with asking for Rent Agreement sample for cross-checking purposes.
Author Bio: Riya is a proficient law reader and has optimum knowledge about ent agreements. Her articles are a pure piece of excellent information.
