When Mukesh Chandra Anchuri moved to Mumbai to work with Indian Oil, he had to find a place to rent. And like any one of us would have experienced while renting a place, Anchuri had to pay a huge sum, of around Rs. 3 lakh, as security deposit – something which was difficult to afford or even arrange within a few days. This made Anchuri wonder why one cannot leverage their credit card to pay the security deposit. There was no platform either where one could use their credit card to make rental payments.

He soon realized there was a bigger issue here. Most often, in a bid to evade taxes, landlords ask for payments to be made in cash – be it rent or the security deposit. And almost always, security deposits are a huge amount of money. With the idea of streamlining this process of rental transactions, Anchuri, along with his Indian Oil colleague Anusha Kurupathi Parambil and his classmate Muralidhar Naik from Birla Institute of Technology, Mesra founded Paymatrix in November 2015.

Before actually starting operations, the team researched on around 2800 people to understand the pain points. What came out of the research was that tenants faced an issue of lack of access to credit for big-ticket rental payments. And for landlords, the pain points faced was the lack of a platform to be able to streamline payments received from tenants. Also, most tenants and landlords wanted a proper trail of transactions made.

Taking all of this into account, Anchuri and his team built Paymatrix, a platform that lets tenants pay rent and security deposit with access to credit and lets landlords streamline payments.

How does Paymatrix work?

If you are a tenant, once you register on Paymatrix, you undergo an identity check through KYC (Know Your Customer) process and can start paying rent through Paymatrix electronically. And not just through netbanking and debit cards, tenants can also use their credit cards to make payments. In case the tenant does not have a credit card, Paymatrix offers short term personal loans with an interest rate of around 11-16%. For this, the company has partnered with 4-5 banks and a few NBFCs.

Once the payment is made on the platform, the amount is credited into their account by Paymatrix.

And if you are a landlord, Paymatrix offers a dashboard to manage payments from multiple tenants, set payment reminder alerts and automate payments.

This generates an electronic trail of all transactions made between the landlord and tenants.

Additionally, Paymatrix also offers services of screening tenants and making rental agreements. “We have templates of the agreement online where the landlord has to fill in the required details and that of tenants. They just have to pay the stamp duty online and we get the document franked, authenticated and deliver it to their doorstep,” Anchuri says.

And in states like Karnataka, the startup is working to leverage the e-payment of stamp duty.

Paymatrix Team
Paymatrix team: Co-founders Mukesh Chandra Anchuri, Anusha Kurupathi Parambil and Muralidhar Naik 
Every landlord on its platform can also screen potential tenants. Paymatrix offers a profiling service where a check is run on the tenant in terms of an identity, credit and psychometric analysis. “We charge as low as Rs. 150 per tenant and give a composite overview based on 182 parameters so the landlord knows who they are renting the house to,” co-founder Parambil says.

The company currently has around 4500 tenants and landlords on its platform and has its services in over 10 cities.

For every payment made on credit on Paymatrix, the company earns a convenience fee of 1.5-2.5%. It also earns through the rental agreement service and a subscription fee charged to landlords.

Paymatrix also has B2B model where it provides its services to commercial and co-working spaces. It manages rental payments for its incubator T-hub and manages rental collections for several other property management and real estate players in Hyderabad.

A big boost to Paymatrix has been the government’s move to dis-incentivize cash payments and the recent crackdown on fake rental receipts. Just earlier this month, an Income Tax Appellate Tribunal held that tax exemptions on house rent allowances cannot be given against fake rent receipts. According to a report on the Time of India, an assessing officer can now demand proof — such as leave and license agreement, letter to the housing co-operative society informing about the tenancy, electricity bill, water bill etc. — in allowing a lower taxable income as computed by a salaried employee.

“We are trying to bring all transactions that were once made by cash to an online platform thereby ensuring landlords are accountable for this income. We saw a considerable jump in our business after demonetization. More than tenants, landlords began taking to our platform as tenants were not able to make cash payments,” Naik, CTO says.

But Anchuri and his team recognizes the challenges that are still faced with landlords not wanting to disclose rental income. “Our target audience is very clear when it comes to landlords. We only target those in metro cities, those who hold multiple properties, are well-educated and can access the internet. They should be willing to optimize their tax liability,” Anchuri says.

In fact, Paymatrix also offers integrated tax filing services for rental income received by landlords.

Paymatrix has so far invested around Rs 50 lakhs into the business, which was bootstrapped. It also raised $40,000 funding and is now looking to raise an additional $300,000 for geographical expansion and to hasten up product development. It has also won awards like HYSEA 2017 for early stage consumer startups.

Road to scale

Going forward, Paymatrix wants to become a complete rental analytics player. Using the data points, it wants to be able to even create innovative financial products. For example, Paymatrix is working on a rental insurance scheme for landlords. This composite insurance protects landlords from potential default by a tenant or a mishap in the house. This also created opportunities for its partner banks and NBFCs.

Paymatrix is also looking at building a physical presence in the geographies it operates in, to be able to provide better services, especially to commercial clients.

Operating in a $4-billion market, Paymatrix sees an opportunity to introduce a lot more services. The 14-member team is currently seeing a 27% month-on-month growth and is recovering 70-80% of its operational costs. And with even government policies like the forthcoming Model Tenancy Act and the Benami Property Act working it its favour, Paymatrix hopes to break even within the next year.

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Now salaried class taxpayers cannot claim house rent allowance or HRA exemption on the basis of fake rent receipts in name of their mother, father, wife or any other close relative. The Income Tax Department may disallow fake HRA exemptions on basis of guidelines recently issued by the Mumbai ITAT (Income Tax Appellate Tribunal). Now onwards, such taxpayers may have to keep other documents to substantiate payment of rent to claim HRA exemption.

HRA exemption

Many salaried class taxpayers claim exemption of house rent allowance (HRA) by furnishing fake rent receipts – in the name of their mother, father, wife or any other close relative – to their employer. Till now, there was no guidance available with the Income Tax Department to deal with such cases and taxpayers firmly believed that only rent receipt was sufficient proof to show genuineness of rental payments. Taxpayers make such sham transactions with the sole intention of claiming HRA exemption in order to reduce tax liability.

 Problems taxpayers can face

Now, salaried class taxpayers which were claiming HRA exemption on the basis of fake rent receipts may find it difficult to claim the exemption. Recently, the Mumbai ITAT issued guidelines for income tax officials to deal with such cases.

In a case, a woman working as senior finance and accounts executive had claimed an HRA exemption of Rs. 7,31,640 for Assessment Years 2009-10 to 2011-12. She also owned a 2 BHK house, jointly owned by her with her husband.

She was showing payment of rent to her mother for residential purposes. She did not produce any evidence except rent receipts to substantiate that there was actual hiring of premises. Her claim was disallowed by the Assessing Officer and the CIT(A).

On further appeal, the Mumbai tribunal disallowed her claim of HRA exemption on the ground that there were no evidences available to substantiate hiring of premises except the rent receipt. The taxpayer could not produce any evidence to substantiate rental payments such as leave and license agreement, letter to society intimating about tenancy, payment through bank, electricity bill and water bill payments etc. It also said “the taxpayer was staying in her own flat with her husband which is emanating from ration card, bank statement and return of income. The mother of assessee also did not file any income-tax return since last six assessment years and said rental income was not brought to tax in the hands of mother of assesse.”

Procedure to follow

You should have evidence of your actual stay at residential house of your mother, father, wife etc. (viz. close relative). You can enter into a rent agreement for this purpose. You may also keep a copy of any other correspondence through email wherein there is consent of your relative to let out the house in your favour.

It is difficult to substantiate rental payments made in cash. So, it’s better to pay house rent to your close relative through transfer of money in his or her bank account.

If you are making rental payments which will be taxable in the hands of your close relative, make sure that he or she files income tax return (ITR) and shows such rental receipts in that return of income.

Married women cannot claim HRA exemption by showing rental payments to their mother when actually living with husband and daughter in another house.

It may happen that the addresses mentioned in your ration card, bank statement and return of income do not match with the recorded address of your rented premises. In that case, you will be in trouble as now the Income Tax Department may scrutinize such cases. Such a probe may indicate that you are living in another house in the same city as you rented premises.

You cannot claim HRA exemption if you have own house in the same city wherein your rented house is situated. It is difficult to prove the necessity of new rental house when you already have one house at your disposal.

You can claim HRA exemption if your rented house is situated in the same city where you work but your own house is outside that city. For example, suppose Mr A is working in Delhi and claiming HRA exemption for rented premises the tax officer cannot disallow such claim if his own house in situated outside Delhi.

You will have to ensure that your rental payments do not exceed the market value of similar property in your vicinity. Suppose you are paying a rent of around Rs. 40,000 for a 1 BHK house in Delhi, it clearly shows that it is a sham transaction. The income tax officer may disallow HRA exemption in such a case.

If you are staying in any flat of society of your relative, make sure to intimate the secretary of society about your tenancy.

If you are claiming tax deduction for EMI of home loan in your income tax return, do not claim exemption of HRA. However, you can claim both the deductions simultaneously if your own house is not in the same city in which you are working and you have taken rented accommodation in the same city where you are working.


Get in the Ring‘ (GITR) Competition is conducted by Netherlands based ‘Get in the Ring Foundation’ which was established in 2012 to reduce the failure of startups globally by connecting startups to hidden opportunities that are usually missed by entrepreneurs.

The third edition of ‘Get in the Ring‘ happened in Hyderabad which witnessed entrepreneurs battling with their competitors while investors and start-up leaders acted as jury members.A total of 24 start-ups participated in the day-long competition held on 6th April at T-HUB, Hyderabad of which six reached the semifinals for a face-off. The top six were Paymatrix, Authbase, Gayam Motor Works, SpotDraft, ATL, NicheAI.


Telangana Today - 07 April 2017 - page 12


For further information about the Paymatrix and GITR can be explored by visiting and

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