7 Key Changes in ITR-1 and ITR-4
The Income Tax Department has rolled out the Excel-based utilities for ITR-1 and ITR-4 for filing returns for Assessment Year 2025–26 (FY 2024–25). Alongside this release, several validation rule updates have been introduced — especially for taxpayers choosing the old tax regime. These changes largely affect salaried individuals, as well as those with deductions related to house rent, home loans, electric vehicle loans, or health and education expenses.
Here’s a breakdown of the seven major updates every taxpayer should be aware of while filing this year’s return.
1. Mandatory Detailed Disclosure for HRA Claims
Taxpayers claiming House Rent Allowance (HRA) now need to furnish complete details, including:
- Place of employment
- HRA received during the year
- Actual rent paid
- Basic salary + Dearness Allowance
- Whether the city is metro or non-metro (to apply 50% or 40% rule)
This granular level of detail ensures that HRA claims are consistent with AIS data and rental proofs.
2. Section 80C: Investment Proof Now Mandatory
Deductions under Section 80C (up to ₹1.5 lakh) now require:
- Policy number or unique identification for each investment (like LIC, PPF, ELSS, etc.)
This change aims to cross-verify claims with financial institutions and minimize incorrect deductions.
3. Section 80D: Health Insurance Policy Details Required
To claim medical insurance deductions under Section 80D, you now need to provide:
- Name of insurer
- Policy number/document ID
This ensures deductions match with data reported by insurance companies.
4. Section 80E: More Transparency for Education Loan Interest
For claiming interest deduction on education loans under Section 80E, taxpayers must now disclose:
- Lender’s name and bank
- Loan account number
- Date of loan sanction
- Total loan sanctioned
- Loan outstanding as of 31st March
- Total interest paid
5. Section 80EE / 80EEA: Residential Home Loan Details Required
Deductions for interest on home loans now need to be backed with:
- Loan sanction details
- Lender’s name and bank
- Account number
- Loan amount & outstanding balance
These details will be cross-checked with AIS and bank data.
6. Section 80EEB: Electric Vehicle Loan Tracking
For interest claims on electric vehicle loans, taxpayers must submit:
- Lender/bank name
- Loan details including sanction date, account number, amount sanctioned, and outstanding balance
7. Section 80DDB: Specified Disease Treatment Details
To claim deductions under Section 80DDB, one must now mention:
- Name of the specified disease being treated
This aligns with the push for transparent and verifiable medical expense claims.
Why These Cross-Verification Changes Matter
With increasing digitization, the Income Tax Department is now:
- Matching rental data with AIS reports
- Verifying home loan claims with bank-reported information
- Confirming insurance and investment claims with issuer data
- Scrutinizing health and education-related deductions
Any inconsistency could lead to scrutiny notices or denial of deductions.
Pro Tips to Stay Compliant
To ensure a smooth filing experience:
- Reconcile Form 26AS & AIS before filing
- Keep digital proof of LIC, PPF, ELSS, NSC investments
- If claiming HRA over Rs. 1 lakh/year, ensure landlord’s PAN is provided
Use the AIS Reconciliation Tool to match your records
Need Expert Help?
The government’s systems are becoming smarter. That means taxpayers must be better prepared while filing their returns. Whether you’re salaried, a freelancer, or a business owner — start early, verify everything, and file with confidence. Taxunplug is here for you — a trusted platform for stress-free ITR filing, personalized advice, and complete support.
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