From HRA to home loan interest: Documents required for tax deductions under draft rules 2026

Under the Draft Income Tax Rules 2026, employees are required to submit evidence of claims to their employer for deductions under section 392(5)(b) of the Income Tax Act.

The draft rules state, "The assessee shall furnish to the person responsible for making payment under section 392(1), the evidence or the particulars of the claims referred to in sub-rule (2), in Form No. 124 for the purpose of estimating his income or for computing the tax required to be deducted at source.”

Employees can support tax deduction claims under section 392(5)(b) of the Income Tax Act by following Rule 205 of the Draft Income Tax Rules 2026. They must submit Form No. 124 with the required documents to their payer, allowing the employer to accurately calculate TDS and estimate income.

House Rent Allowance (HRA)

Name, address, and PAN of the landlord(s) if rent paid exceeds ₹1 lakh, including relationship with the landlord.

Leave Travel Concession (LTC)

Evidence of expenditure.

Home Loan Interest

Name, address, and PAN of the lender.

Other Deductions under Chapter VIII

Evidence of investment or expenditure.

The draft rules make it clear that the accurate submission of Form No. 124 is mandatory for employees seeking these deductions.

It is customary for the government to release a draft of new rules before finalisation.

When will the new Income Tax Rules take effect?

The Income Tax Rules, 2026, will come into effect from April 1, 2026, alongside the Income Tax Act, 2025.