Rules 204 and 205 of the Draft Income-tax Rules, 2026 lay down detailed requirements for furnishing particulars and evidence for deduction of tax at source (TDS) from income under the head “Salaries” under section 392. Rule 204 permits an assessee to furnish particulars in Form No. 122 to the employer, including salary received from other employers, loss under “Income from house property,” income under other heads (excluding losses), and TDS or TCS details for the same tax year. The employer must provide a statement of perquisites or profits in lieu of salary and their value in the prescribed format—through relevant columns in Form No. 130 where annual salary does not exceed ₹1,50,000, or in Form No. 123 where it exceeds ₹1,50,000. The term “salary” carries the meaning assigned under Rule 15. Rule 205 requires employees to furnish evidence or particulars of specified claims in Form No. 124 for proper tax estimation and TDS computation. These include landlord details (with PAN) for House Rent Allowance where annual rent exceeds ₹1 lakh, proof of expenditure for leave travel concession, lender details for interest deduction under “Income from house property,” and supporting evidence for deductions under Chapter VIII. Together, these provisions standardize documentation and strengthen accuracy in salary-based TDS compliance.
Extract of Rule No. 204, 205 of Draft Income-tax Rules, 2026
Rule 204
Furnishing of particulars for deduction of tax at source from income under the head “Salaries”
(1) The assessee may furnish following particulars in Form No. 122, to the person responsible for making the payment referred to in Section 392(1), for the purpose of making deduction under the said sub-section, namely:
(a) any income under the head “Salaries” due or received by the assessee, from any other employer or employers during the tax year;
(b) any loss under the head “Income from house property” for the same tax year;
(c) any income chargeable under any head of income other than “Salaries”, not being a loss under any such head for the same tax year;
(d) any tax deducted or collected at source under Chapter XIX-B of the Act for the same tax year.
(2) The person responsible for paying any income chargeable under the head “Salaries” shall furnish to the person to whom such payment is made, a statement giving correct and complete particulars of perquisites or profits in lieu of salary and the value thereof in, –
(a) relevant columns provided in Form No. 130, if the amount of salary paid or payable to the employee for the tax year is not more than one lakh and fifty thousand rupees; or
(b) Form No. 123, if the amount of salary paid or payable to the employee for the tax year is more than one lakh and fifty thousand rupees.
(3) “Salary” for the purposes of this rule shall have the same meaning as given in Rule 15.
Rule 205
Furnishing of evidence of claims by employee u/s 392(5)(b) for deduction of tax from income under the head “Salaries”
(1) 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.
(2) In respect of the claim specified in column (B) of the Table below, the assessee shall furnish the evidence or the particulars specified in column (C) thereof:
TABLE
| Sl. No. | Nature of claims | Evidence or particulars |
| (A) | (B) | (C) |
| 1 | House Rent Allowance | Name, address and permanent account number of the landlord/landlords where the aggregate rent paid during the tax year exceeds rupees one lakh and relationship with the landlord, if any |
| 2 | Leave travel concession or assistance | Evidence of expenditure |
| 3 | Deduction of interest under the head “Income from house property” | Name, address and permanent account number of the lender |
| 4 | Deduction under Chapter VIII | Evidence of investment or expenditure. |
