This is a common practice to produce fake house rent receipts to claim higher tax relief on HRA. Many people I know, do this year after year. They purchase ready made rent slip booklets from market, fill up the details and one of the friends signs there on receipts after pasting revenue stamps ,etc, if required. Then these receipts get submitted to company.
It’s also required to submit copy of rental agreement if rent per month is above Rs. (where is my rupee symbol?) 10,000/-. Ah, no big deal, take your rent agreement, scan it and open Photoshop or even MS-Paint if you are keen ☺, change the rental amount to whatever you want and take a print-out of the modified version.
I didn’t hear until recently that anyone gets punished due to such activities but a recent verdict by High Court clearly implies that if the employer finds any discrepancies, then he can sack you. Source
Another practice people employ is to submit fake LTA bills. “The trick is very easy. Book train tickets online from IRCTC, take their printouts and then cancel those tickets. After some time, submit these tickets to claim your LTA”, said a friend working in one of the Top Indian IT company. He has been doing this since years. The safeguard here is that railway recycles PNR number after some time, so almost no way to trace whether you actually traveled on these tickets or not.
Well, I want to say just one thing, how corrupt the Govt. is, it’s still run on our money only. Country is changing may be on slow pace but changes are there. Whatever didn’t happen in the past may happen in future. Now a days almost every transaction gets attached with your PAN number, why take risk for petty amounts? So don’t do such malpractices and always vote in elections, if you think you are doing wrong due to bad politics, corruption and all. Remember, someone very well said, “Bad politicians are elected by good citizens who do not vote.”
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Great work!
Thanks a lot Richa!
Way to go!!
I do agree it’s a malpractice but it is prevalent and will be for always as it doesn’t bother the company in which you are employed . The Company is not at all interested or one can say not concerned about how much tax you are paying to the govt.
The loss is of Indian govt. only .
Sooner or later I think there will be some special auditors in Indian taxation dept. who will check these malpractices and will punish not only the guilty but also his employer . Then only this ” FARZIPANA ” will end .
Yes Manoj, this practice is rampant in use everywhere. But I do feel, its not something which can be enforced from employer alone. An employer can collect the required documents but its Govt/I-T dept. duty to verify them and levy fine if found guilty.
Simple things like mandatory mention of PAN of self and house owner can be done where if a mismatch found or something went wrong, the HRA exemption claim get rejected along with a fine. This will immediately crack down the practice and most of people refrain producing fake receipts.
Hi Jagbir,
Good to see investorshine. Great effort..! All the best.
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moneysights.com
Hi Santosh, Thank you! just a small beginning with part-time efforts. Will take lot of time to come into shape .. but enjoying a lot
Generally we have a deadline for submission of IT proofs in the month of January itself, some of the employees have the premium payment due dates on February or march… how do they submit those bills and docs? pls clarify… can those bills be considered later say in april month finally???
I will tell one situation.
AJAY and VIJAY is earning same income and their HRA is 12000/-.
ajay is staying in costly home, so got much hra exemption.
vijay is sacrifising his comforts and staying in hut.
Dont you feel its injustice to vijay?
Why there is partiality to ajay and vijay when both income is same. and why vijay have to pay more tax to govt.
everyone want to get max exemption so want to spend lavishly like ajay.
Why govt is encouraging people to spend more money, the result is india with lack of investments and depends on world bank loans.
if govt is encouraging us to save much money, we would have saved so much money and that money is very well used in india’s investments/ economy / technology development.
Saving is great art, always we need to encourage them and never screw them.
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