File full and accurate details in tax return forms to claim deductions

Providing incomplete or inaccurate information can have penal consequences

The Income-tax Department has expanded disclosure requirements in the income-tax return (ITR) forms for financial year (FY) 2025-26, or assessment year (AY) 2026-27. Taxpayers must now provide additional details to support various deduction claims in their returns.

 

Why more disclosures are required

 

The enhanced disclosures in the ITR forms for AY2026-27 are meant to align the return forms with changes in tax law. “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.

 

“Cross-verification helps establish the legitimacy of deduction claims and restricts bogus claims,” says Chandni Anandan, tax expert, ClearTax.

 

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. Correctly identify whether the residence is in a metro or non-metro city,” says Surana. This classification determines whether the threshold is 40 per cent or 50 per cent of salary.

 

Taxpayers must provide the landlord's Permanent Account Number (PAN) if annual rent exceeds Rs 1 lakh. Taxpayers should claim only the amount that the prescribed formula permits. “A few conditions apply: 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 Anandan. Taxpayers under the new tax regime cannot claim the HRA exemption.

 

Home-loan interest

 

To claim a deduction for home-loan interest under Section 24(b), taxpayers must state 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 interest claimed under Section 24(b) should match the interest certificate issued by the lender. “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.

 

Surana says the department cross-checks claims against lender records, Form 16, the Annual Information Statement (AIS) and Form 26AS, so taxpayers should avoid unsupported claims and retain all documents.

 

Section 80C claims

 

Section 80C disclosures depend on the type of investment or payment claimed. “Life insurance claims may require the policy number, while contributions to the Public Provident Fund (PPF), equity-linked savings schemes (ELSS), National Savings Certificates (NSC), tuition fees or home-loan principal repayments may require the relevant account or document reference number,” says Surana.

 

Taxpayers should support all Section 80C claims with valid documents. They should claim deductions only for eligible investments and remain within the prescribed limit.

 

Section 80D claims

 

Keep the insured person's and insurer's details, policy number, premium, payment mode and proof ready for Section 80D claims. “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. Premiums paid for policies covering parents have a separate limit,” says Vivek Jalan, partner, Tax Connect Advisory Services.

 

He adds that top-up and super top-up health plans also qualify if they are issued by a registered insurer.

 

Sections 80G and 80GGC claims

 

Taxpayers claiming a deduction under Section 80GGC must disclose the name and PAN of the political party or electoral trust. They must make contributions through prescribed banking channels because cash contributions are not eligible for the deduction.

 

Taxpayers should retain receipts and verify the donee's registration under Section 80G. “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 Jalan.

 

Anandan says deductions under Section 80G now require the transaction reference number and the bank's Indian Financial System Code (IFSC), while Section 80GGC claims for political donations require the name and PAN of the political party.

 

Mistakes to avoid

 

Common mistakes include incorrect PANs and transaction reference numbers, duplicate deduction claims, and relying on pre-filled data without verifying it, according to Shetty.

 

Even small mismatches or incomplete details in the new ITR disclosure fields can trigger disallowance, defective-return notices or penalties. “The Income-tax Department's artificial intelligence (AI) systems verify deductions against AIS, the Taxpayer Information Summary (TIS) and donee filings. Incorrect or incomplete details under Sections 80D, 80G or 80GGC may lead to disallowance,” says Jalan. He adds that taxpayers should cross-check all salary, deduction and donation entries and ensure that supporting documents are valid and traceable.

 

Shetty says taxpayers can correct genuine errors by filing a revised return within the prescribed timeline. For AY2026-27, taxpayers can revise an ITR until March 31, 2027.

 

Errors can have consequences

• Incomplete or inconsistent disclosures can result in denial of deductions
• They could result in adjustments during return processing
• The tax department may undertake additional scrutiny
• Taxpayers could receive a defective-return notice
• Under-reporting or misreporting can attract penal consequences

 

The writer is a Mumbai-based independent journalist.