Rule 205 — Furnishing of evidence of claims by employee under section 392(5)(b) for deduction of tax from income under head “Salaries”. Made under s.392 of the Income-tax Act, 2025.
Rule 205 gives effect to Section 392 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) requires the assessee to furnish to the person responsible for making payment under section 392(1) the evidence or the particulars of the claims referred to in sub-rule (2), in Form No. 124, for the purpose of estimating his income or computing the tax required to be deducted at source.
Sub-rule (2) sets out, in a Table, what has to be furnished for each claim. For house rent allowance: the name, address and Permanent Account Number of the landlord or landlords where the aggregate rent paid during the tax year exceeds Rs. 1,00,000, and the relationship with the landlord, if any. For leave travel concession or assistance: evidence of expenditure. For a deduction of interest under the head "Income from house property": the name, address and Permanent Account Number of the lender. For a deduction under Chapter VIII: evidence of investment or expenditure.
Section 392(5)(b) makes the employer's estimate of salary income depend on evidence of the employee's claims, without saying what evidence. The rule fixes it: one form, and a short list of what each kind of claim needs. It puts the burden of substantiation on the employee at the deduction stage, so the employer is not left estimating tax on an unsupported assertion.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Rent threshold above which the landlord's details must be furnished | Aggregate rent paid during the tax year exceeds Rs. 100000 | For a house rent allowance claim; the name, address and Permanent Account Number of the landlord or landlords, and the relationship with the landlord, if any | Sub-rule (2), Table Sl. No. 1 |
The Table asks for different things for different claims, and the difference matters. Leave travel concession and Chapter VIII deductions need evidence of the expenditure or investment; the house rent allowance and house property interest claims need identification of the other party — the landlord's or the lender's name, address and Permanent Account Number. The landlord's details are required only where the aggregate rent paid during the tax year exceeds Rs. 1,00,000, but the relationship with the landlord, if any, has to be stated where that threshold is crossed. The evidence goes to the employer, not to the Department, and its purpose under sub-rule (1) is estimating income and computing the deduction — it does not settle the claim in the employee's assessment.
An employee pays rent of Rs. 15,000 a month, Rs. 1,80,000 for the year, and claims house rent allowance. Because the aggregate exceeds Rs. 1,00,000, Form No. 124 must carry the landlord's name, address and Permanent Account Number and the relationship, if any. The same form carries evidence of expenditure for the employee's leave travel concession claim and evidence of investment for the Chapter VIII deductions claimed.
You meet it every year as the declaration the employer collects before the last months of salary deduction, and the details in it reappear in the salary computation supporting the deduction certificate.
The assessee shall furnish to the person responsible for making payment under section 392(1), the evidence or the particulars of the claims referred to in sub-rule (2) in Form No. 124, for the purpose of estimating his income or for computing the tax required to be deducted at source.
Name, address and Permanent Account Number of the landlord or landlords, where the aggregate rent paid during the tax year exceeds Rs. 100000 and relationship with the landlord, if any.