ITR filing for AY 2025-26: 7 prominent changes in ITR excel utilities for FY 2024-25, which taxpayers including salaried should know

The income tax department has made several changes in the income tax return (ITR) validation rules for reporting income earned during FY 2024-25 (AY 2025-26). As of today, only the Excel-based ITR filing utilities for ITR-1 and ITR-4 have been released. A brief look at these utility forms suggests that most of these changes apply to salaried individuals or taxpayers with any electric car loans, home loans, house rent, etc., particularly those who are required to file ITR-1.

All of these changes are in the nature of enhanced declarations. Experts say this has been done to minimise the incidence of false claims regarding income tax deductions during the time of ITR filing. Earlier, the tax department used to check the tax deduction’s authenticity manually during the process of the ITR. Now, this process is automated and integrated at the ITR filing level, resulting in fewer chances of errors in ITR and potentially faster processing.

What are the changes in ITR validation rules for FY 2024-25 (AY 2025-26)?

Most of the changes in validation rules relate to tax deductions that can be claimed under the old tax regime. Here are seven changes introduced in the ITR filing utility for FY 2024-25 (AY 2025-26):

1. Enhanced Disclosure for House Rent Allowance (HRA): Taxpayers claiming HRA exemption must now provide comprehensive details, including:

• Place of Work
• Actual HRA Received
• Actual Rent Paid
• Basic Salary and Dearness Allowance
• 50% or 40% of Basic Salary, depending on whether the city is metro or non-metro.

Source: ITR-1 excel utility

2. Section 80C Deduction: Taxpayers now have to disclose the policy number or document identification number to claim Section 80C tax deduction. Do note under Section 80C eligible taxpayers can claim up to Rs 1.5 lakh as tax deduction for investing in various instruments like PPF, tax savings FD, life insurance policies, etc.

Source: ITR-1 excel utility

3. Section 80D: Health Insurance Details Taxpayers claiming deductions under Section 80D for medical/health insurance must now provide:
•Name of the Insurance Company
•Policy or Document Number

4. Section 80E: Education Loan Interest For deductions on interest paid on education loans under Section 80E, the following details are now mandatory:

• Name of the Lender
• Bank Name
• Loan Account Number
• Date of Loan Sanction
• Total Loan Amount
• Loan Outstanding as on 31st March
• Interest of the loan

5. Section 80EE / 80EEA: Interest on Home Loan Similar disclosures are required for interest deductions under Section 80EE or 80EEA for residential house property:

• Name of the Lender
• Bank Name
• Loan Account Number
• Date of Loan Sanction
• Total Loan Amount
• Loan Outstanding as on 31st March

6. Section 80EEB: Electric Vehicle Loan Interest For interest paid on loans taken for the purchase of electric vehicles under Section 80EEB, taxpayers must provide:
•Name of the Lender
•Bank Name
•Loan Account Number
•Date of Loan Sanction
•Total Loan Amount
•Loan Outstanding as on 31st March

7. Section 80DDB: Treatment of Specified Diseases Taxpayers claiming deductions under Section 80DDB for medical treatment of specified diseases are now required to mention the:
•Name of the Specified Disease

Chartered Accountant Abhishek Soni, co-founder, Tax2Win, says: “The above mentioned new requirements are introduced in the ITR-1 and ITR-4 forms for Assessment Year 2025–26, and they were not part of the old forms in this level of detail.”

Soni explains using an example: “For example, for HRA exemption, previously only the exemption amount was entered manually and for claiming the deductions, only deduction amount was entered. In technical terms, in earlier ITR forms, only aggregate deduction amounts were entered, and supporting documentation was needed only upon scrutiny. Now, the ITR utility is capturing this information upfront, indicating a shift toward pre-validation and increased compliance transparency.”

Chartered Accountant Gopal Bohra, Direct Tax Partner, N. A. Shah Associates LLP, says: "In order to bring more control or vigil over wrong claim of various deductions under the old tax regime, the Income Tax Department has introduced several new validation rules in the e-Filing portal, so that the data which is being uploaded are accurate and compliant to the validation rules. In case, data quality defect is of category A nature, return will not be allowed to be uploaded, and an error message will be displayed."

Bohra adds: "In category A defect, 276 validation rules for ITR -1 and 347 for ITR 4 are deployed and if any of the validation rules fails, return will not be allowed to be uploaded. Just to explain some of the category A validation rules, taxpayer who is claiming deduction for health insurance premium is required to disclose the name of the insurance company and policy number for claiming deduction under section 80D. Similarly, in relation to interest on education loan, housing loan, purchase of electric vehicle for claiming deduction under section 80E, 24(b)/80EE/80EEA, 80EEB respectively, details of bank from which loan is taken and date of sanction to be provided. If any of these fields are missing in the ITR, taxpayer may not be able to upload the ITR. Further, if the data quality as provided by the taxpayer is accurate, the tax return will be processed quickly."

Experts say the tax deduction system was abused, which is why the tax department may have introduced these changes. Chartered Accountant Ashish Niraj, Partner, A S N & Company, says: " In recent past income tax department has detected many cases where Income Tax Refund was obtained on the basis of false claims or forged documents, hence additional information are being sought now in ITR 1 for cross verification purpose at the time of assessment if required.”

According to Niraj, "Some taxpayers used to claim HRA Deduction and also Home Loan Interest deduction even though both was in same city. Now 'Place of work' is required for claiming HRA. For Loan related deductions also Name of Financials Institutions/Bank, Loan Account No, Date of Sanction, Total Loan Amount, Outstanding Loan Amount , Interest etc is required to check the authenticity of the deductions. For Investment related deductions Policy/Document Number are required , for 80D Name of Insurer also required apart from policy details etc. All these information are now sought so that taxpayer can claim deduction only if he has full details available."