Tax filing is a tedious and burdensome process, which is as necessary as it is complicated. Filing tax returns is more than complying with regulations; in fact, it is considered a social duty of every individual in the country. More so for salaried professionals, who spend the last few days running around to submit their tax filings.

Despite several reminder emails from HR and finance teams, most employees end up missing the income tax proof submission deadline. If you fail to make the submissions on time, your Form-16 will reflect the heavy taxes that you are owed. However, you still have the opportunity to optimize your tax savings by securing refunds. You can still approach the income tax department for exemptions and deductions that you failed to leverage in the first place. To make sure you do it right this time around, it is better to hire a tax filing services provider like Taxspanner.

In this article, we will discuss how you can get refunds from the IT department by claiming HRA (House Rent Allowance) after you forget to submit proof with your employer.

Significance of HRA in Tax Savings

HRA is one of the key components in the salary structure of employees in India. If you check your payslip, you will see that HRA is the largest pay section, which means you can save more here. It can reduce your tax liability significantly by maximizing your savings if used correctly. Under Section 10(13A) of the Income Tax Act, you are eligible for tax deductions for rented accommodations. Any tax filing services company can guide you through this process.

The majority of the individuals who skip claiming HRA deductions do so due to the complicated math involved in calculating tax exemption. It is, however, quite simple. You need to calculate the least of the following:

• Actual HRA mentioned in your salary
• 50% of the sum of basic salary and DA for those living in metro cities
• 40% of the sum of basic salary and DA for those living in non-metros
• Actual rent paid minus 10% of the sum of basic salary and DA

A lot of working professionals keep postponing tax filing for a later day and end up overlooking some of the key documents like submitting rent receipts to your employer for HRA exemptions. If you are one of them, don’t worry, you can still sort it out.

All you need to do is claim HRA when submitting your returns through a tax filing services company or independently. Even if the employer has deducted the tax, you still can claim HRA exemption while filing ITR and claim tax credit.you have paid all the outstanding tax bills, you are still eligible for a tax refund after a thorough evaluation. For this, you need to gather all the necessary documents and follow a systematic IT returns submission procedure. You can make the process easy through a tax filing services provider.

Below are some of the key points, you need to consider:

Signed rent receipts are essential to claim HRA exemptionfor an HRA refund

Rent receipts are valid and critical documents to prove your rent expenditure. Ideally, you should get monthly rent receipts from your landlord with their signature. Planning to get them done at the last minute can prove to be a challenge. Even if you forgot to submit the paperwork to your employer, you still need to get the receipts or rental agreement for a hiccup-free refund. You must also note that if your annual rental expenses exceed Rs 1 lakh, you are required to submit the PAN details of your landlord.

When an employer doesn’t provide HRA

In some rare cases, companies may not provide an allowance for house rent. But you can still leverage the HRA exemption to optimize your taxes. Section 80GG allows a provision for salary employees to claim a deduction when the employer doesn’t allow HRA. A tax filing services company can guide you through this process easily.

Regardless, you need to meet the eligibility criteria:

• You must either be self-employed or a salaried individual.
• Your employer has provided HRA for the entire year for which you are claiming a deduction.
• Either you, your spouse, or your minor child does not own a residential accommodation at the place where you work.
• If you do own a residential property, it must be leased out.

Claim tax exemptions without hassle through Taxspanner

The tax filing process demands significant time and effort from individuals, who may not afford to do so. But it doesn’t reduce the importance of submitting your tax returns efficiently to avoid paying penalties or violating regulations. Understanding the challenges that most people face when making their income tax submissions, TaxSpanner has built a seamless platform for individuals and business owners to optimize their tax savings. It provides expert advice at a very affordable cost to maintain your financial wellness.