Since the introduction of new tax regime in FY 2020-21, the government has been encouraging taxpayers to adopt it by offering benefits like lower tax rates, higher rebates and increased standard deduction. Essentially, they’re trying to make the new regime the go-to option and gradually phase out the old tax regime.
Taking another step in this direction, the government is asking for more detailed information from those who want to claim deductions under the old regime starting this year.
This not only makes filing under the old regime more time-consuming and effortful, but also helps the government curb the issue of people claiming fake deductions.
So, if you choose to continue with the old tax regime for AY 2025-26, here’s what you need to know.
What’s changed this year?
As I said, the government now requires more information when you claim deductions under different sections. Let’s see what they asked earlier vs what all details will you have to provide this year onwards.
House Rent Allowance (HRA)
Earlier, you only needed to mention the deductible amount. Now, you’ll need to provide these additional details:
- Place of work (Metro/Non-Metro)
- Actual HRA received
- Actual rent paid
- Salary details like basic amount, dearness allowance
Interest on education & home loans – Sections 24(b), 80E, 80EE, 80EEA
Earlier, you could simply mention the deductible amount. But now, these details are required:
- Bank name
- Loan account number
- Loan sanction date
- Total loan amount
- Loan outstanding as on 31st March
- Interest amount deductible
Life Insurance, PPF, ELSS – Section 80C
Previously, you only needed to declare a lump sum amount to be deducted from your gross income. Now, you must mention the Document Identification Number (say policy number in case of life insurance) along with the amount eligible for deductions.
Health insurance – Section 80D
For health insurance, earlier, you only provided the insurance premium amount. Now, you need to give:
- Insurance company name
- Policy number
- Health insurance amount
Medical treatment of specified diseases – Section 80DDB
Earlier, you only had to mention the deduction amount. Now, you must specify the name of the disease to claim your deduction.
What does this mean for you?
Now that the ITD is asking for extra information from you, it will be easier for them to cross-verify your claims with records from banks, insurance companies, employers, and government platforms.
So, if you plan to stick with the old tax regime this year as well, make sure all your documents are in order! This will help avoid any scrutiny and ensure you can claim all your eligible deductions.
And if things go wrong, you could get a notice from the income tax department and even penalties.