Income tax filers will now have to disclose their relationship with their landlord to qualify for rent deductions. This change is part of the new Income Tax Act 2025, which will take effect on April 1 of this year.
Add informalnewz.com as a Preferred Source
New Rent Exemption Rules: The Income Tax Department has introduced new rules and forms to curb tax evasion and increase transparency. Those who evade taxes by declaring house rent will now be required to disclose their relationship with their landlord. Corporate audit and PAN card regulations have also been tightened. All these changes are part of the new Income Tax Act 2025, which will come into effect on April 1st of this year. The government has just released a draft for public comment. The final rules and forms will be notified next month.
The new ‘Form 124’ will require tenants to disclose their relationship with the landlord. Tax experts believe this will curb fraudulent or inflated rent claims, as they must disclose everything clearly from the outset. Employees are required to provide rent information for House Rent Allowance (HRA). Experts say that those who pay rent honestly have nothing to fear. But it will now be easier to catch those who make false claims without any payment or ownership rights.
Learn important things
- It will now be mandatory to disclose the relationship between the tenant and the landlord to prevent fraudulent rent receipts.
- Companies will be required to provide in writing that they have only one PAN card, not a second one.
- More robust evidence and auditor scrutiny will now be required to claim foreign tax credits.
- An auditor finding discrepancies in a company’s accounts will directly impact tax liability.
Tightening of tax exemptions on foreign income
The draft forms also tighten the tax exemptions on foreign income. Accountants will now have to closely examine evidence of foreign tax payments, payment receipts, and regulations themselves. According to experts, this could create some difficulties in cases where tax receipts from foreign companies do not contain complete information.
Companies will have to provide a declaration.
Regulations for applying for a PAN card for companies have also become stricter. Companies will now have to provide a declaration stating that they do not already have a PAN. The new tax audit ‘Form No. 26’ has become even more stringent.
