Taxpayers must provide more details to support deduction and exemption claims.
The income-tax department has expanded disclosure requirements in the income-tax return (ITR) forms for financial year (FY) 2025-2026, or assessment year (AY) 2026-2027.
Taxpayers must provide more details to support deduction and exemption claims.
Key Points
- The income-tax department has expanded disclosure requirements in ITR forms for FY26 to improve verification of deduction and exemption claims.
- Taxpayers must provide detailed information for HRA, home-loan interest, Section 80C, Section 80D and donation-related deductions.
- Claims will be cross-verified using Form 16, AIS, Form 26AS, lender records and artificial intelligence-driven tax systems.
- Incorrect PAN details, unsupported deductions or incomplete disclosures can lead to claim rejection, scrutiny and defective return notices.
- Experts advise retaining supporting documents, matching disclosures with official records and avoiding duplicate or incorrect deduction claims.
Why more details are required
The changes are meant to align the ITR forms with changes in tax law and strengthen verification.
"The additional disclosures will enable more accurate verification of exemption and deduction claims at the return-processing stage," says Suresh Surana, a Mumbai-based chartered accountant.
House rent allowance
For house rent allowance (HRA) claims under Section 10(13A), taxpayers must disclose their place of residence, HRA received, rent paid and salary details.
"Ensure that HRA details match Form 16 and rent records.
"Claim the exemption only if you actually pay rent and occupy the rented accommodation, and correctly identify whether the residence is in a metro or non-metro city," says Surana.
This determines whether the 50 per cent or 40 per cent salary threshold applies.
Taxpayers must provide the landlord's permanent account number (PAN) if annual rent exceeds ₹1 lakh and claim only the amount permitted under the prescribed formula.
"HRA cannot be claimed if it is not received as a salary component.
"The self-employed cannot claim HRA and may instead consider relief under Section 80GG.
"It also cannot be claimed if you live in your own house," says Chandni Anandan, tax expert, ClearTax.
Taxpayers under the new tax regime cannot claim the HRA exemption.
Home-loan interest
To claim a deduction under Section 24(b), taxpayers must disclose whether the loan came from a bank or another source.
"They must disclose the name of the lender, loan account number, sanction date, loan amount, outstanding balance, and interest claimed," says Anandan.
The claim must match the lender's interest certificate.
"Taxpayers should report it according to whether the property is self-occupied, let out or deemed to be let out, as the applicable limits and treatment differ based on the nature of the property," says Surana.
The department cross-checks claims against lender records, Form 16, the Annual Information Statement (AIS) and Form 26AS, so taxpayers should retain documents and avoid unsupported claims.
Section 80C claims
The disclosures required depend on the investment or payment being claimed.
"Life insurance claims require the policy number, while contributions to the Public Provident Fund (PPF), equity-linked savings scheme (ELSS), National Savings Certificate (NSC), tuition fees or home-loan principal repayments require the relevant account or document reference number," says Surana.
Section 80D claims
Keep the insured person's and insurer's details, policy number, premium, payment mode and proof ready.
"Taxpayers must pay premiums through non-cash modes, except for preventive health check-ups, and remain within the prescribed deduction limits," says Deepashree Shetty, partner, tax and regulatory advisory, BDO India.
Premiums for policies covering the taxpayer, spouse and dependent children qualify for the deduction.
A separate limit is available for parents.
Top-up and super top-up plans from registered insurers also qualify.
Sections 80G, 80GGC claims
Claims under Section 80G for donations to charitable funds require the transaction reference number and the bank's Indian Financial System Code (IFSC) details.
Use banking channels, retain receipts and verify the donee's Section 80G registration.
"The new ITR forms require donor details, PAN, address, payment mode and acknowledgement number, which ensures that only transparent, verifiable donations qualify for deductions," says Vivek Jalan, partner, Tax Connect Advisory Services.
"Section 80GGC claims require the political party's name and PAN," says Anandan.
Cash contributions do not qualify.
Mistakes to avoid
Avoid entering incorrect PAN and transaction reference numbers.
Retain supporting documents and avoid duplicate claims.
"The income-tax department's artificial intelligence (AI) systems verify deductions against AIS, Taxpayer Information Summary (TIS) and donee filings.
Incorrect or incomplete details under Sections 80D, 80G or 80GGC may lead to disallowance," says Jalan.
Errors can trigger penalties
- Incomplete, inconsistent disclosures can result in denial of deduction.
- They could result in adjustments during return processing.
- Tax department may undertake additional scrutiny.
- Taxpayer could get a defective return notice.
- Under-reporting or misreporting can attract penal consequences.
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Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.
Feature Presentation: Ashish Narsale/Rediff
