Every salaried person in India fills one of these at the start of the year: the form where you tell your employer what deductions you intend to claim, so they can work out your TDS. For a decade that was Form 12BB. It no longer exists.
Under the Income-tax Rules, 2026, the declaration is now Form 124, made under section 392(5)(b) of the Income-tax Act, 2025 read with rule 205. The old form was made under section 192 and rule 26C, both of which went with the 1961 Act.
What actually changed
The purpose is the same. You still list house rent, home loan interest, section 80C investments and the rest, and you still attach evidence. Three things are different:
- The number and the legal basis. Form 124, not 12BB. Section 392(5)(b) and rule 205, not 192 and 26C.
- The terminology. The Act says “tax year” now. “Assessment year” is gone.
- A new question about your landlord. If you claim HRA, you have to declare your relationship with the landlord, if any.
That last one is the change worth paying attention to.
The landlord question
Paying rent to a parent and claiming HRA is legal, and always has been. It is also the arrangement that is most often claimed on paper and not in fact.
Declaring the relationship does not make it disallowed. It makes it visible. If the arrangement is real, nothing changes for you:
- The property must genuinely be owned by them, and not by you
- The rent must actually leave your account — pay by bank transfer or UPI, not cash
- They must show it as income in their own return
If it is an arrangement that exists only in a rent receipt book, it is now much easier to spot, and it is treated as evasion rather than planning.
While you are at it, check the PAN threshold
This one catches people out because it is widely misquoted. The landlord’s name, address and PAN are required when the rent you pay during the year exceeds ₹1,00,000 — roughly ₹8,333 a month.
It is not based on the HRA you claim, and not on the exempt amount. If your rent crosses the line, you need the PAN even if your exemption works out to much less. Where the landlord genuinely has no PAN, get a signed declaration from them saying so.
And check which city you are in
Separately from all this, the Income-tax Rules, 2026 widened the list of cities that get the 50% HRA limit instead of 40%. It used to be four — Mumbai, Delhi, Kolkata, Chennai. It is now eight, with Bengaluru, Hyderabad, Pune and Ahmedabad added.
If you rent in one of those four, your exemption may be larger this year than last, with no change to your salary or your rent. Plenty of payroll software has not caught up, so it is worth checking your own figures rather than accepting what the TDS sheet assumes.
What to have ready
- Rent receipts for every month you are claiming, numbered and signed
- The landlord’s PAN, if your annual rent is over ₹1,00,000
- Your relationship with the landlord, if there is one
- Your actual basic pay and DA from the payslip — not your CTC, which is what most people wrongly use
Make it now
Keep reading
- Rent Receipts for HRA, and What Gets Them RejectedA receipt your payroll team sends back costs you the exemption for that month. Most rejections come down to four things.
- How to Read Your Salary SlipMost people look at one number on their payslip. The one that decides your PF, your gratuity and your HRA exemption is a different one.
- Salary Certificate, Salary Slip or Form 130?Three documents prove your income, and they are not interchangeable. Form 16 has also been renamed: for salary paid from April 2026 it is Form 130.