Income Tax Department is Cross-Verifying Claims in Real Time
Starting AY 2025–26, real-time verification of deduction claims is being rolled out by the Income Tax Department. If you’re filing under the old tax regime, every exemption—from HRA to insurance—can now be matched live with databases like mParivahan, AIS, and bank data.
Gone are the days of rounding off numbers casually. The tax department is tightening the screws, and here’s what you need to know.
Why the Cross-Verification Matters
The department’s systems now automatically flag mismatches when:
- HRA claims don’t match rental transactions in AIS
- Home loan interest is claimed but loan isn’t reflected in bank records
- Section 80C entries like PPF or LIC are inconsistent with financial data
- Medical insurance (80D) isn’t linked with insurer-reported data
👉 Focus keyphrase: Income Tax Department
What’s Changing in ITR Forms
In the new ITR-1 and ITR-4 for AY 2025–26:
| Old System | New System |
|---|---|
| Single figure under Section 80C | Breakup needed: LIC, ELSS, PPF, etc. |
| No auto-checks on HRA | HRA now auto-verified via mParivahan |
| Claimed deductions = final | Claims matched against AIS/TIS reports |
| Self-declared 80D insurance | Insurer’s PAN-mapped data now linked |
📌 Source: CBDT Notification No. 40/2025 dated 29.04.2025
How to Avoid a Tax Notice
Stay compliant with these steps:
- ✅ Reconcile your AIS and Form 26AS before filing
- ✅ Retain proof for LIC, PPF, NSC, ELSS – upload where applicable
- ✅ Match rent receipts with PAN of landlord (if HRA > ₹1 lakh/year)
- ✅ Use AIS/TIS tool to confirm government-recorded transactions
Expert View: Why This Shift?
CA Vijaykumar Puri explains:
“The new verification system is a nudge towards the new tax regime. Fewer exemptions, lower tax rates, and minimal disputes—exactly what former Finance Minister Arun Jaitley envisioned.”
Old vs New Tax Regime: Compliance Pressure
| Point | Old Regime | New Regime |
|---|---|---|
| Deductions needed? | Yes, must be proved now | No deductions allowed |
| Risk of mismatch notice | High | None (if salary structure is simple) |
| Filing effort | High (proofs, reconciliation) | Low (auto-calculated taxes) |
Final Word: Prepare Before You File
The Income Tax Department has gone digital, and so should your tax prep. Whether you’re salaried or running a business, stay ahead by verifying all claims before filing.
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FAQ Section (SEO Boost)
Q1. Can I still claim HRA if I pay rent in cash?
A: Only if your landlord has a PAN and the amount exceeds ₹1 lakh annually. Avoid cash to ensure traceability.
Q2. What if my AIS shows wrong data?
A: You can raise a correction request directly in the AIS portal before filing your return.
Q3. Is this applicable to new regime filers?
A: No. Real-time verification impacts only old regime taxpayers claiming deductions.
Summary
The Income Tax Department is now using real-time systems to verify old regime deductions like HRA, LIC, and 80C claims. Mismatches can trigger tax notices. Cross-check your data before filing.