The income tax department has made several changes in the income tax return (ITR) validation rules for reporting income earned during FY 2024-25 (AY 2025-26). As on date only the excel based ITR filing utilities for ITR-1 and 4 have been released. A brief look at these forms suggests that most of these changes are relevant for salaried persons, or those taxpayers who have any electric car loan, home loan, house rent, etc i.e. those who need to file ITR-1.
All of these changes are in the nature of enhanced declarations. Experts say this has been done to stop the instances of false claims of income tax deductions at the time of ITR filing. Earlier, the tax department used to check the tax deduction’s authenticity manually at the time of processing the ITR. Now this process is automated and brought at the ITR filing level, which means less chances of errors in ITR and possible faster processing of ITR.
What are the changes in ITR validation rules for FY 2024-25 (AY 2025-26)?
Most of the changes in validation rules relate to tax deductions that can be claimed under the old tax regime. Here are seven changes introduced in the ITR filing utility for FY 2024-25 (AY 2025-26):
1. Enhanced Disclosure for House Rent Allowance (HRA): Taxpayers claiming HRA exemption must now provide comprehensive details, including:
- Place of Work
- Actual HRA Received
- Actual Rent Paid
- Basic Salary and Dearness Allowance
- 50% or 40% of Basic Salary, depending on whether the city is metro or non-metro.
Enhanced Disclosure for House Rent Allowance (HRA):
Source: ITR-1 excel utility2. Section 80C Deduction: Taxpayers now have to disclose the policy number or document identification number to claim Section 80C tax deduction. Do note under Section 80C eligible taxpayers can claim up to Rs 1.5 lakh as tax deduction for investing in various instruments like PPF, tax savings FD, life insurance policies, etc.
Section 80C Deduction
Source: ITR-1 excel utility
3. Section 80D: Health Insurance Details Taxpayers claiming deductions under Section 80D for medical/health insurance must now provide:
•Name of the Insurance Company
•Policy or Document Number
4. Section 80E: Education Loan Interest For deductions on interest paid on education loans under Section 80E, the following details are now mandatory:
- Name of the Lender
- Bank Name
- Loan Account Number
- Date of Loan Sanction
- Total Loan Amount
- Loan Outstanding as on 31st March
- Interest of the loan
5. Section 80EE / 80EEA: Interest on Home Loan Similar disclosures are required for interest deductions under Section 80EE or 80EEA for residential house property:
- Name of the Lender
- Bank Name
- Loan Account Number
- Date of Loan Sanction
- Total Loan Amount
- Loan Outstanding as on 31st March
6. Section 80EEB: Electric Vehicle Loan Interest For interest paid on loans taken for the purchase of electric vehicles under Section 80EEB, taxpayers must provide:
•Name of the Lender
•Bank Name
•Loan Account Number
•Date of Loan Sanction
•Total Loan Amount
•Loan Outstanding as on 31st March
7. Section 80DDB: Treatment of Specified Diseases Taxpayers claiming deductions under Section 80DDB for medical treatment of specified diseases are now required to mention the:
•Name of the Specified Disease
Chartered Accountant Abhishek Soni, co-founder, Tax2Win, says: “The above mentioned new requirements are introduced in the ITR-1 and ITR-4 forms for Assessment Year 2025–26, and they were not part of the old forms in this level of detail.”
Soni explains using an example: “For example, for HRA exemption, previously only the exemption amount was entered manually and for claiming the deductions, only deduction amount was entered. In technical terms, in earlier ITR forms, only aggregate deduction amounts were entered, and supporting documentation was needed only upon scrutiny. Now, the ITR utility is capturing this information upfront, indicating a shift toward pre-validation and increased compliance transparency.”
Experts say the tax deduction system was abused, which is why the tax department may have introduced these changes. Chartered Accountant Ashish Niraj, Partner, A S N & Company, says: ” In recent past income tax department has detected many cases where Income Tax Refund was obtained on the basis of false claims or forged documents, hence additional information are being sought now in ITR 1 for cross verification purpose at the time of assessment if required.”
