The Indian income tax system has introduced an important compliance change under revised Rule 205.
Salaried employees claiming House Rent Allowance (HRA) must now disclose their relationship with their landlord.
Earlier, submitting rent receipts or a rent agreement was usually enough.
Now, taxpayers must clearly state whether the landlord is a relative or not — and provide details accordingly.
This change could impact millions of salaried employees who claim HRA as part of their salary package.
What Exactly Has Changed?
Under the updated rule, HRA claimants must disclose:
Whether the landlord is a relative (as defined under income tax law)
The nature of the relationship — such as father, mother, sibling, etc.
If not a relative, standard details like landlord’s name, PAN, and address
This information must be provided while filing your income tax return.
Employers may also ask for these details while calculating TDS (Tax Deducted at Source).
In short, payroll systems and salary declarations may soon include new fields asking about your landlord relationship.
Why the Government Introduced This Rule
The move is aimed at increasing transparency and preventing misuse of HRA exemptions.
In some cases, employees claimed HRA while paying rent to close relatives without proper documentation.
This made it difficult for tax authorities to verify whether the rental arrangement was genuine.
By mandating relationship disclosure, the government wants to:
Discourage fake rental arrangements created only for tax savings
Make verification easier during tax scrutiny
Strengthen compliance checks
It’s important to note that renting from relatives is not illegal. Many families live in joint setups where such arrangements are genuine.
The new rule simply demands more transparency.
What Taxpayers Should Do Now
If you claim HRA, make sure your paperwork is complete and accurate.
Here’s what you should keep ready:
Updated rent agreement
Rent receipts
Bank transfer proof of rent payment
Clear record of landlord relationship
If you’re unsure how this affects your tax filing, consult a tax professional before submitting your return.
Failure to provide proper details could result in your HRA claim being rejected — which means higher taxable income and possibly more tax to pay.
The message is simple: HRA benefits remain available, but proper disclosure and documentation are now more important than ever.
