📋 New Compliance: Furnishing Evidence for Salary Deductions

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Understanding Rule 205 of the Draft Income Tax Rules, 2026.

The Draft Income Tax Rules, 2026 introduce a standardized procedure for employees to claim tax benefits on salary income. Under Rule 205, taxpayers must provide specific evidence to their employers to ensure accurate TDS estimation and computation.

Submission via Form No. 124

Employees are required to submit the evidence or particulars of their claims to the person responsible for making salary payments (the employer).

  • 📑 Standard Form: All claims must be furnished using Form No. 124.

Evidence Requirements Table

The draft rules specify the exact details needed for various common salary-related deductions:

Nature of Claim Required Evidence or Particulars
HRA                                                                                                                       Name, address, and PAN of the landlord (if aggregate annual rent exceeds ₹1 lakh) and relationship with the landlord.
LTC Actual evidence of expenditure.
House Property Interest Name, address, and PAN of the lender.
Chapter VIII Deductions Documentary evidence of investment or expenditure.

Professional Insight: Documentation is Key 💡

Rule 205 underscores the shift toward stricter verification at the employer level. Taxpayers should particularly note the requirement to disclose their relationship with the landlord for HRA claims. This is likely intended to curb sham rent transactions among relatives. Ensuring your PAN details and investment proofs are organized before the investment declaration deadline will be critical for accurate take-home pay.

Source Reference: Draft Income Tax Rules 2026 - Rule 205.

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