CBDT clarifies no drive to reopen cases for mismatch in HRA claims: As well as conducting data analysis for high-value cases, the Income Tax Department announced on Monday that it has discovered a discrepancy between the rent paid by salaried employees and the rent received by the recipient for the 2020-21 fiscal year.
The CBDT dismissed claims that it is reopening House Rent Allowance (HRA) cases. In a “small number” of cases, tenant rent and recipient rent were verified.
Data analysis was performed on a subset of high-value cases with an employee-recipient rent difference for the 2020-21 fiscal year.
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“This verification was conducted in a small number of cases without reopening the majority of cases, especially since the taxpayers in question could not have filed their Updated Return for FY 2020-21 (AY 2021-22) until March 31, 2024,” the CBDT said in a memo.
E-verification was supposed to find FY21 information anomalies, not prior ones.
In its usual data verification process, the CBDT found discrepancies between taxpayer and Income Tax Department data.
The department alerts taxpayers to correct.
Salary income includes HRA, which is taxable. An employee who rents may be exempt from income tax on HRA collected during the year with verified rent receipts.
If taxpayers choose the new tax regime, which does not exempt, they will not receive the exemption.
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