What draws questions
- Claims your employer didn't allow. Deductions in your return that are much larger than in Form 16 (Form 130 from 2026-27).
- HRA above the formula. HRA is tax-free only up to the lowest of: HRA received, rent minus 10% of basic, and 50% (metro) or 40% of basic.
- No landlord PAN when rent is over ₹1 lakh a year.
- Rent to a spouse, or to a parent who doesn't show the rent as income.
- Donations (80G) to organisations that aren't eligible, or receipts that don't match.
- Income in your AIS, like interest or share sales, that's missing from the return.
What it can cost
Besides the tax and interest, the Income-tax Act, 1961 (which covers FY 2025-26 returns) has a penalty of 50% of the tax on under-reported income, and 200% where income is misreported, such as through false claims.
Claimed something you shouldn't have?
| When | How to fix it |
|---|---|
| Until 31 March 2027 (FY 2025-26) | File a revised return |
| After that, within 48 months | File an updated return, paying extra tax of 25% to 70% of the tax and interest, depending on how late |
| After a notice | Reply in e-Proceedings with documents, or correct the return if the notice allows |
An updated return can only add income: it can't reduce your tax or raise a refund.
Keep these for every claim
- HRA: rent agreement, receipts, bank records of rent paid, landlord's PAN
- 80C, 80D, NPS: receipts and statements
- Home loan: the lender's interest certificate
- Donations: the receipt with the organisation's PAN and registration
Got a notice already? See what each notice means and how to reply.
Common questions
Why do salaried people get notices for HRA?
Usually because the HRA claimed is more than the formula allows, the landlord's PAN is missing for rent over ₹1 lakh, or the claim doesn't match Form 16.
What is the penalty for a false deduction claim?
200% of the tax on misreported income, besides the tax and interest. Under-reporting without misreporting is 50%.
How do I correct a wrong deduction claim?
For FY 2025-26, file a revised return by 31 March 2027. After that, an updated return within 48 months, with extra tax of 25% to 70%.
Can an updated return reduce my tax?
No. It can only add income: it can't reduce tax or raise a refund.
Two ways to sort this
Do it yourself
- Compare each claim in your return with Form 16 and the rules.
- Collect documents for every claim: rent, receipts, certificates.
- If something was wrong, file a revised return before 31 March 2027.
- If a notice has come, reply in e-Proceedings before the deadline.
Let an expert do it
We review your claims, fix a wrong one before a notice, or reply to a notice with the right documents.
The first chat is freeWork it out for yourself
- HRA exemption: How much of your HRA is tax-free.
- 80C planner: Use your ₹1.5 lakh 80C limit well.
- Health insurance (80D): Deduction for health insurance and check-ups.
- Rent receipt generator: Monthly rent receipts for HRA, as a PDF.
- Income tax: old vs new: Which regime leaves more in your account.
Check how much HRA you can really claim.
Open the HRA calculatorSources
- Tax rules for salaried individuals, AY 2026-27, Income Tax Department
- Responding to a defective return notice and a prima facie adjustment under 143(1)(a): user manual, Income Tax Department e-filing portal
- Updated return of income, Income Tax Department
- Income tax returns: FAQs, Income Tax Department e-filing portal
This guide explains the rules in general. For your own situation, .