Rent paid in cash is not illegal, but this one mistake could cost salaried tenants their HRA benefit
New Delhi, Aug. 7 -- Many landlords in India still prefer to collect rent in cash, whether it's for a rented apartment, a shared flat or a paying guest (PG) accommodation. While this may be convenient for some tenants, it often raises an important question: Can you still claim House Rent Allowance (HRA) if you've paid your rent in cash?
The short answer is yes.
Paying rent in cash does not automatically disqualify you from claiming HRA under the old tax regime. However, since cash payments don't leave a digital trail, you'll need to maintain proper records to support your claim. Without adequate documentation, the Income Tax Department may question or even reject your HRA claim.
"The general idea is that cash rent payments do not negat...
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