Employer Cannot Issue Revised Form 16, But You Can Still Claim HRA While Filing ITR

The employer issues Form 16 only after the annual returns of TDS have been filed with the income tax department. A deduction of Rs. 5,000 is available for preventive health check-up within the overall limit of Rs. 25,000 under Section 80D
Employer Cannot Issue Revised Form 16, But You Can Still Claim HRA While Filing ITR

I have not filed my income tax return (ITR). My employer has deducted full tax on my salary. My house rent allowance (HRA) has been mentioned as taxable in my Form 16, since I did not claim deductions earlier. However, now I wish to claim HRA by showing rent to my father and claim a refund. Can I do this? How should I proceed with it? Will this invite trouble since I am basically saying that Form 16 is incorrect?

Answer: Since Form 16 is issued by the employer only after the annual returns of tax deducted at source (TDS) have been filed with the income tax department, it will not be possible for your employer to issue you a revised Form 16 now. However, you can claim your HRA exemption while filing your income tax return. Please note that in case your ITR is selected for detailed scrutiny, for claiming this exemption of HRA, which is not reflected in Form 16, you will have to prove that you had actually paid the rent for the property occupied by you, which is not owned by you. 

If you are not able to prove the actual payment conclusively, you may face serious consequences in the form of denial of the claim and penalty. I would advise you to refrain from doing such things. Please note that there is no restriction on paying rent to parents to claim HRA. So, you can start paying rent by cheques prospectively and claim HRA benefits to avoid the red flag being raised on your ITR. Please note that your parent will have to include such rent in their hands and pay tax on it.

I am a senior citizen covered by parental health insurance provided by my daughter. I have incurred expenses towards health check-up and for purchasing medicines from medical shops. Can I get tax benefit under Section 80D of the Income-tax Act, 1961 for these expenses incurred by me within the limit of Rs. 5,000? 

Answer: Under Section 80D of Income-tax Act, 1961, a person is entitled to a deduction of up to Rs. 25,000 in respect of the insurance premium paid towards health insurance for self, spouse and dependent children. 

An additional deduction of Rs. 25,000 is also available for insurance premium paid for parents of the taxpayer, whether dependent or not. The deduction available in respect of senior citizens is higher at Rs. 50,000 in a year in each of the above category. 

A deduction of Rs. 5,000 is available within this overall limit for amount spent on preventive health check-up for each category. 

Though your daughter is paying the health insurance premium, you can claim an amount up to Rs. 5,000 paid by you for your regular health check-up. Please note that this deduction is available only for health check-up, and not for buying medicines. The deduction is available only if the amount is spent for preventive health check-up. So, in my opinion, any expenditure incurred for check-up as part of regular treatment will not be available for deduction here.

The author is a tax and investment expert

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.) 

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