The government has released draft documents ahead of the new Income Tax law coming into force from April 1. Under the proposed rules, taxpayers claiming deductions on house rent will be required to provide documentary proof of the rental agreement with the property owner. Salaried individuals claiming House Rent Allowance (HRA) must now disclose ownership confirmation. A new Form 124 will require disclosure of the relationship between the assessee and the property owner. Tax experts believe this will curb inflated or fictitious rent claims.
The draft also increases accountability for auditors and companies claiming foreign tax credits. Chartered accountants must independently verify foreign tax withholding certificates, proof of payment, currency conversion details, tax eligibility, and residential status of taxpayers. Significant changes have also been proposed for home loan benefits. Tax deductions under Section 80C on housing loans will no longer apply, and interest deduction benefits for self-occupied houses will also be withdrawn.