CBDT: No Special Initiative To Reopen HRA Mismatch Cases, Confirms

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New Delhi: The Central Board of Direct Taxes (CBDT) on Monday provided clarification regarding cases involving inaccurate claims of House Rent Allowance (HRA). The board stated that during routine verification of data, it had observed instances where the information provided by taxpayers didn't match with the records available to the Income Tax Department.

The Income Tax Department has notified taxpayers in such situations, allowing them to rectify any errors. Nonetheless, there have been reports on social media and in the news about CBDT inquiries into cases where employees have inaccurately claimed HRA and rental expenses. (Also Read: Govt Bonds Worth Rs 30,000 Crore To Come Up For Auction On April 12)

"At the outset, it is stated that any apprehensions about retrospective taxation on these matters and re-opening of cases on issues pertaining to HRA claims is completely baseless," the department stated. ()

The department further added, “Data analysis was carried out in some high-value cases of mismatch between the rent paid by the employee and receipt of rent by the recipient for the FY 2020-21…This verification was done in a small number of cases without re-opening bulk of cases, especially since Updated Return for FY 2020-21(AY 2021-22) could have been filed by the taxpayers concerned only till 31.03.2024."

The CBDT emphasized that the verification process was conducted in a limited number of cases and did not involve reopening a large number of cases. The notice also explained that the primary purpose of electronically verifying HRA claims was to identify discrepancies in information for the fiscal year FY 21 without impacting others.