New ITR filing rules demand more disclosures: Here’s what taxpayers need to know for AY 2024 25

ITR filing AY2025-26: The Income Tax Department has rolled out significant upgrades to the Income Tax Return (ITR) filing utility for Assessment Year (AY) 2024-25, introducing stricter disclosure requirements aimed at curbing false claims and speeding up processing. The updates particularly impact salaried individuals and those filing under the old tax regime, signalling a clear push towards greater transparency and pre-validation of tax data.

More details needed

One of the biggest changes affects taxpayers claiming House Rent Allowance (HRA) exemptions. Previously, filers only needed to manually enter the exemption amount. Now, the ITR utility requires a breakdown that includes the place of work, actual rent paid, basic salary, and the exact HRA received. This shift aims to reduce incorrect claims and ensure that exemptions are backed by accurate, verifiable information.

Similarly, individuals seeking deductions under Section 80C, which allows up to ₹1.5 lakh in tax benefits through investments like Public Provident Fund (PPF), tax-saving fixed deposits, and life insurance premiums, must now disclose policy numbers or document identification numbers for these investments. This was not mandatory in earlier years.

“The new system is moving towards pre-validation, capturing details upfront rather than relying solely on post-filing checks,” note tax professionals. “It’s a significant step in enhancing compliance and minimising erroneous claims.”

Expanded disclosure requirements

The heightened disclosure requirements extend well beyond HRA and Section 80C.

Under Section 80D, those claiming deductions for health insurance premiums must now provide:

Name of the insurance company

Policy or document number

For deductions on education loan interest under Section 80E, taxpayers must report:

Name of the lender

Bank name

Loan account number

Date of loan sanction

Total loan amount

Outstanding loan balance as on March 31

Total interest paid

Homebuyers seeking benefits under Sections 80EE and 80EEA for interest paid on housing loans must similarly furnish lender details, bank name, loan account numbers, sanction dates, loan amounts, and year-end outstanding balances.

Likewise, for those availing deductions under Section 80EEB on interest paid for electric vehicle loans, identical loan details are now mandatory.

Under Section 80DDB, individuals claiming expenses for the treatment of specified diseases must now clearly mention the name of the disease being treated.

Excel utilities vs common offline utilities

Alongside these regulatory changes, taxpayers filing returns offline have new tools available for AY 2024-25.

The Excel Utilities, released on May 29, allow taxpayers to prepare returns offline using spreadsheet-based formats. While useful for early filers, these utilities lack advanced integration features like real-time prefilled data and typically require manual uploads to the tax portal after preparation.

In contrast, the Common Offline Utilities—built using JavaScript and JSON—are designed to align closely with the Income Tax Department’s backend systems. They offer dynamic forms, comprehensive validations, and seamless import of prefilled data directly from the tax portal, making the filing process smoother and more accurate.

Tax experts urge filers to choose the utility that best suits their comfort level and filing complexity while ensuring compliance with the new disclosure norms. As the ITR filing season gains pace, staying informed about these enhanced requirements will be crucial for avoiding errors, delays, and possible scrutiny.