Important Income Tax Disclosures You Need to Know This Year

Starting from April 1, 2025, the income tax slab under the new tax regime will change. Taxpayers can select between the old and new tax regimes, but the government is providing benefits to encourage people to switch. One important benefit is that individuals who are earning up to Rs. 12 lakh may have zero tax liability under the new regime.

Income Tax disclosures under old and new regimes

Taxpayers must provide specific disclosures under both tax regimes, including information about their bank accounts and any interest earned. They need to mention their bank account numbers and report the interest earned on savings accounts. there is no need to report dormant or inactive accounts. Also, one main account must be chosen for receiving tax refunds, if applicable.

They must report any unlisted shares they own, their role as a director or partner in a business, and details of their assets and liabilities. If they have any foreign assets or income, that also needs to be disclosed.

Income Tax disclosures under the old regime

An expert said that in the old tax regime, taxpayers need to disclose extra details because of the different tax exemptions and deductions they can claim. these details include:

Deductions: Section 80C (investment-related savings), 80D (health insurance premiums), 80E (interest on education loans), 80G (charitable donations).

Allowances and Exemptions: House Rent Allowance (HRA) claims (rent paid, landlord details), Leave Travel Allowance (LTA) exemption (travel-related expenses).

Other Disclosures: Home loan interest (Section 24b), adjustment of house property losses (set-off and carry-forward), tax-free allowances (education, transport), and job-related benefits (perquisites).

If a taxpayer chooses the old tax regime, they can claim House Rent Allowance (HRA) as a tax-free benefit under Section 10(13A). But this benefit is not available under the new tax regime. To claim HRA, taxpayers must submit rent receipts, which should include the landlord’s name, rent amount, payment date, and address.

One common tax exemption is Leave Travel Allowance (LTA), which also applies to LTA received from a previous employer. This exemption can be claimed for any two years but is only valid for travel within India.

Under the new tax regime, most deductions under Chapter VI-A (such as 80C, 80D, 80G) cannot be claimed. However, deductions under Sections 80CCD(2), 80CCH, and 80JJAA are still allowed as per Section 115BAC of the Income Tax Act, 1961.