As good payroll governance, employers may consider validating the landlord’s PAN details duly submitted by employees for the purpose of claiming exemptions from House Rent Allowance (HRA).
Validate the landlords PAN details duly submitted by employees
This would facilitate better preparation by the employers to have an informed conversation with select employees and respond to statutory communications arising from submission of incorrect or duplicate PAN of landlords by the employees.
Tax authorities have observed that employees are providing either incorrect or duplicate PAN of their landlord to claim the HRA exemption. Also, its observed that no corresponding rental income was offered to tax by the corresponding landlord. The tax authorities, in some instances, have reached out to certain employers to spread awareness of such claims.
To adhere to good payroll governance, KPMG in India has developed a solution to help in verifying whether the employee has provided appropriate details of the landlord with regard to claiming the HRA exemption.
As a practice the employees make declaration in the first quarter of the financial year followed by submitting proofs in the last quarter. It may be worthwhile for employers to check the appropriateness of information provided prior to extending the exemption to the employees.
Enhance governance on employees HRA claims by validation of landlord's PAN
- Appropriateness of PAN
- Matching PAN and name of landlord (provided by employees with income tax records)
- Seeding of landlord’s PAN and Aadhaar
- Identification of similar landlord details provided by multiple employees
- Tax filing compliance for the landlord’s reported by the employee.
- Summary report of number of discrepancies
- Comprehensive report detailing the discrepancies
- Valid PAN details
- Duplicate PAN details
- Mismatched PAN details.
All data is hosted on the KPMG in India secure environment.
Approx 4500 PAN records can be validated per employer per day.
Value add
Key Contacts
