Section 80GG of Income Tax Act – Deductions in Respect of Rent Paid, Conditions & Eligibility

What is 80GG Deduction?

What is 80GG Deduction? Usually HRA forms part of your salary and you can claim deduction for HRA. If you do not receive HRA from your employer and make payments towards rent for any furnished or unfurnished accommodation occupied by you for your own residence, you can claim deduction under section 80GG towards rent that you pay.

Conditions to fulfill for claiming deduction under section 80GG

• You are self-employed or salaried
• You have not received HRA at any time during the year for which you are claiming 80GG HRA component should not form part of your salary to claim 80GG.
• You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of the office, or employment or carry on business or profession.
• In case you own any residential property at any place, for which your Income from house property is calculated under applicable sections (as a self-occupied property), no deduction under section 80GG is allowed.
• You will be required to file Form 10BA with details of payment of rent.

Eligible Amount of Deduction Under 80GG – 80GG Deduction Limit

The lowest of these will be considered as the deduction under this section- 

• Rs.5,000 per month
• 25% of the total Income (excluding long-term capital gains, short-term capital gains under section 111A and Income under Section 115A or 115D and deductions under 80C to 80U. Also, income is before making a deduction under section 80GG).
• Actual rent less 10% of Income
  Do take benefit of this section – provided all conditions have been fulfilled by you.

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Important Details Required for Claiming Deduction u/s 80GG

Various details along with the form 10BA are:

• Name, PAN and full address of assessee
• Tenure, amount and payment mode
• Name and address of landlord
• PAN of landlord if rental is above INR 1 lakh
• A declaration that no other house property is owned by the assessee himself or in the name of Spouse/minor child or by the HUF of which he is a member.

Frequently Asked Questions

If I am claiming HRA then can I claim deduction under section 80GG also?

No, if you are claiming HRA then you cannot claim deduction under section 80GG. The benefit can be availed of one only i.e. either of HRA or Section 80GG.

Who can claim this deduction?

Only individuals who are self employed person or who do not receive HRA, can claim deduction under this section.

What is Form 10BA?

It is a declaration that has to be filed by an individual who wants to claim deduction under section 80GG for rent paid on rental property.

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