Key Changes for taxpayers filing under Old Tax Regime

Key Changes implemented for taxpayers filing under Old Tax Regime

Significant changes the Income Tax Department in India has implemented for taxpayers filing under the Old Tax Regime. The IT Department has started auto-verifying claims using an integrated backend system mapped with PAN and Aadhaar. Sources for Cross-Verification: Taxpayer must maintain data will now be checked from like Insurance companies, Banks, Vahan (mParivahan app) & Employers & Government platforms.

Filing under the old tax regime now means more responsibility, more scrutiny, and better documentation. These changes are designed to increase transparency and curb bogus claims. Taxpayer must check Form 26AS and AIS (Annual Information Statement) to verify what data the IT department already has before filing.

Key Changes in the Old Regime Filing:

Now Income tax Form 16 is No Longer Sufficient

• Earlier: Salaried taxpayers could rely solely on Form 16 for ITR-1 filing without uploading any proof for deductions (e.g., LIC, ELSS, HRA, health insurance).
• Now: You must upload documentary evidence to claim deductions under:
  • Section 80C – LIC, ELSS, PPF, Tuition fees
  • Section 80D – Medical insurance
• HRA – Rent receipts + landlord PAN (if rent > ₹1 lakh/year)

• No more lump sum declarations. E.g., Declaring ₹1.5 lakh under Section 80C without itemization is no longer allowed.
• Detailed break-up required for PPF, ELSS, LIC & Other 80C instruments
• Real-time checks and alerts Automated verification, Instant error detection & Immediate notifications for mismatches.

Additional Details You Now Need to Provide:

Taxpayer must maintain the mandatory proof uploads if claiming deductions:

• In case have Insurance (under section 80C, 80D) than must have Policy number, Insurer name & Investment date

• • 80C: Policy/statement of LIC, ELSS, PPF, etc.
  • 80D: Health insurance policy and payment proof
  • 80DD/80U (Disability-related):
    • Form 10-IA acknowledgment number
    • PAN/Aadhaar of dependent
    • UDID (if available)

• In case have Loans (80E, 80EE, 80EEA, 80EEB) than Bank name, Loan account number, Sanction date & Outstanding balance on 31 March. 80E (Education loan): Loan sanction letter, bank details, interest certificate

• In case House Rent Allowance (HRA) must have Employer details, Rent paid proof, Landlord PAN (mandatory if rent > ₹1 lakh/year). HRA: Rent receipts, landlord PAN, employer details

• In case EV Loan Deductions Taxpayer have Vehicle registration number, Loan details & Verified via Parivahan app
• LTCG Reporting in ITR-1 Now Allowed : Taxpayer can now report Long Term Capital Gains (LTCG) up to ₹1.25 lakh from equity shares or mutual funds directly in ITR-1. Profits after 23 July 2025 will be tax-free, as per new exemption rule.
• Cross-Verification System in Place : All deductions will now be auto-verified against backend data from Banks, Insurance Companies, mParivahan (Vehicle loan info), Employers & Govt. portals
• Any mismatch can result in Instant error flags, Notifications for corrections & Rejection of claims

If you don’t have proof, the deduction can be rejected, and tax may become payable.

Where Taxpayer File Also Matters:

• Filing through a third-party portal: Form 16 is mandatory to upload.
• Filing via income tax portal (https://www.incometax.gov.in): Form 16 upload not required, but must be kept for cross-verification. Pre-filled data will include TDS, salary details, etc.

• ITR Filing Due Date Extended : New Deadline (for non-audit cases): 15 September 2025 (Earlier: 31 July 2025)

Important Takeaway for Income Tax Taxpayers & CA or Tax Consultants Point:

• Taxpayers must Keep all investment proofs ready & ensure data matches across PAN/Aadhaar-linked sources. Taxpayers must maintain detailed records—generic entries won’t be accepted. & Prepare for more scrutiny under old regime filings in AY 2025–26 and beyond.
• In summary taxpayer must collect and keep ready before ITR filing:

• • Insurance policy certificates
  • ELSS/Mutual Fund statements
  • Rent receipts + Landlord PAN
  • Health insurance premium payment slips
  • Education loan sanction letter + interest certificate
  • Disability deduction forms and proofs
  • Vehicle loan documents, if claiming EV deduction

ITR Form Selection Based on Head of Income

 

• ITR-1: For salaried individuals (no capital gains, 1 house property, income ≤ ₹50L)

• ITR-2: For individuals with capital gains or more than one house property, foreign income/assets

• ITR-3: For individuals/HUFs with business or profession income (incl. directors, partners)

• ITR-4: For presumptive income (Sections 44AD/ADA/AE)

• ITR-5: For partnership firms, LLPs, AOPs, BOIs

• ITR-6: For companies (excluding those claiming exemption u/s 11)

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