New Delhi, April 22 -- Lately, a number of tax payers have received tax notices from the income tax department for their HRA (house rent allowance) claim. Primarily, these tax notices were sent for not deducting 3 percent TDS (tax deducted at source) while transferring rent to the property owner. It is recommended to follow a three-step checklist to ensure it does not happen.

I. Rent agreement: First and foremost, it is vital to prepare a rent agreement. The agreement is a legal proof that the contract is real.

II. Transfer to bank account: Another important thing to remember is to transfer rent to the bank account rather than paying in cash. "When you transfer rent to the relative's bank account rather than in cash, you create a tracea...