Quick Summary
The Draft Income Tax Rules 2026 propose a more structured reporting framework for employee tax deduction claims, with Draft Form No. 124 introducing detailed disclosure requirements for House Rent Allowance (HRA) and other deductions. The move is aimed at improving transparency, strengthening documentation standards and reducing disputes during tax assessments. The proposed form, issued as part of the broader compliance overhaul by the Central Board of Direct Taxes, outlines comprehensive repor
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FAQ :
Draft Form 124 is a proposed statement designed to collect detailed particulars of employee claims for tax deductions, including HRA, leave travel concessions, and housing loan interest, to support tax calculations by employers.
Employees claiming HRA will need to disclose detailed landlord information, including their name, address, PAN, Aadhaar number, and their relationship to the landlord.
The draft form reiterates that a PAN must be provided if the annual rent paid exceeds £1 lakh.
Employees will be required to attach supporting documents, such as rent agreements, to substantiate their HRA claims.
No, besides HRA, the draft form also captures details for Leave Travel Concessions (LTC) claims, interest on borrowed capital, and deductions under specified sections.
The draft rules and forms are currently open for stakeholder feedback, and once implemented, the new framework is expected to apply from the tax year notified by the government.
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