Section 80GG Deductions – For rent paid

CA Sandeep Kanoi

Deductions is respect of rents paid : Under Section 80GG, an Individual can claim deduction for the rent paid even if he don’t get HRA. Not many people are aware of this deduction.

Section 80GG allows the  Individuals to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions :-

(a)  the Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act;

(b)  the Individual files the declaration in Form No. 10BA.  

(c)  The employee does not own:

 (i)  any residential accommodation himself or by his spouse or minor child or where such Individual  is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

(ii)  at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

(d)  He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG. In other word eligibility will be least amount of the following :-

1) Rent paid minus 10 percent the adjusted total income.
2) Rs 2,000 per month.
3) 25 percent of the adjusted total income.
The deduction will also not be available to an assessee if any residential accommodation is owned by the assessee at any other place, which he is occupying, and the concessions in respect of self-occupied house are claimed by him for that property. In such a case, no deduction will be allowed in respect of the rent paid, even if the person does not own any residential accommodation at the place where he ordinarily resides.
What is the adjusted total income under section 80GG?

The adjusted total income means :-

Gross Total Income

Less

Long Term Capital Gain,

Short Term Capital Gain  of 10% category,

Deductions under sections 80C to 80U except section 80GG and income of foreign company.

Conclusion-Limit under Sec. 80GG has not kept pace with the limits under Sec. 10(13A) obviously because the limit under Sec. 10(13A) could be subject matter of revision by notification, while the limit under Sec. 80GG is stipulated in the statute itself so that an amendment to law would be required for enhancing the limit.

Download Format of  FORM NO. 10BA

Extract of section 80GG

[Deductions in respect of rents paid.

80GG. In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed two thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations :

Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is—

(i) owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

(ii) owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined [under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23].

Explanation.—In this section, the expressions “ten per cent of his total income” and “twenty-five per cent of his total income” shall mean ten per cent or twenty-five per cent, as the case may be, of the assessee’s total income before allowing deduction for any expenditure under this section.]

(Updated on 26.01.2015)

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  1. I am getting Professional fee 70000 per month without HRA and my monthly rent is 7000 in non-metro city. Please let me know how can i calculate rent deduction under section 80 GG. What will be the exact amount?
    Pls do needful.

  2. Sir….

    I get HRA from my employer

    During online return where i have to show the exemption amount?

    Can i show it in 80 gg or there is some other saction

  3. Sir,
    Am receiving HRS 2000.00 per month with my salary.My rent amount per month is 8,000.00 Can i show the full rent amount in 80GG.Shall i produce document for the rent also.
    I had already submitted my return without deducting this amount in 80GG. Can i reverse it now by including this 8000.00 rent amount.

  4. i am a retired person senior citizen. i own a ouse in chennai and getting rent of Rs.7000/p.m. till oct 2013 and remaing part of the fy it is vacant and i am paying rent of Rs.12000/=p.m. in bangalore hou much i am getting deduction under 80gg no hra i have only interest income of 2.30 lacs p.a.

  5. DEAR SIR
    I am getting 7600 HRA /month from my employer , in form 16 it is not deducted any head and i am paying 3500 house rent / month can i avail benefit of 80GG. SIR ,is house rent receipt required to fill income tax return.when i am filling it online (e filling )

  6. the first condition for availing deduction of 80GG is non receiving benefit of HRA, if any person availing benefit of HRA THEN HE CAN’T AVAIL EXEMPTION OF 80 GG

  7. Sir….

    I take exemption for HRA u/s 10….

    During online return where i have to show it……….

    Can i show it in 80 gg

  8. Sir I am working in company I am getting 13000 as a hra in salary and I am in rented house and I am paying 11000 pm and I am not having own house and can I claim 80gg in income tax claim and please suggest me under which section can I get claim -

  9. Hi Sir,

    I have resigned my job in october 2013 so could not submit tax proofs in december. Can i refund my hra while IT Filing. If so, which deduction section in ITR Form could be used for hra claim.

  10. Sir I am getting 3000 as a hra and paying 6000 as a rent and suggest me how can I claim from income tax department

  11. Sir I am working in company I am getting 3000 as a hra in salary and I am in rented house and I am paying 6000 pm and I am not having own house and can I claim 8gg in income tax claim and please suggest me under which section can I get claim

  12. Hi I have received salary inclusive of HRA and notice period pay for few months of last year, post leaving my company on my own , however I continue to pay my rentals for whole year. pls

    advice can I claim any tax benefit for period I was on my own.

  13. I am residing company accommodation. my family living in city area on rent. I have a own house but in diffrent city. I do not get HRA due to company accomodation to me. can I get tax benifit on rent. Pl. reply

  14. My relative,bakery business,His p/l a/c Shop rent shows anualy Rs48000,can exemption reduction in computation of income tax ( individual )on what se.,

  15. RISHNAMOORTHY Says:
    Your comment is awaiting moderation.
    April 10, 2014 At 10:41 AM
    sir
    i am a retired person. i am receiving pension of rs.27000p.m. i am paying
    rent of rs.4000 p m. i am not owing any house . so i need help wether i
    can get any exemption in this regard for income tax purpose. wether i can
    claim rs.2000 p m for income tax purpose.

  16. sir
    i am a retired person. i am receiving pension of rs.27000p.m. i am paying
    rent of rs.4000 p m. i am not owing any house . so i need help wether i
    can get any exemption in this regard for income tax purpose. wether i can
    claim rs.2000 p m for income tax purpose.

  17. Dear Sir,
    I am received the annual salary 238916/ paid the House rent 42000 for annual but not get any HRA from company.

    so, which amount is eligible for deduction u/s 80GG

  18. I am paying rent of Rs 10,000 pm My employers is paying me Rs 8000/- as subsidised housing and directly being paid to my Landlord, however in my payslip there is no component of HRA. Will I get benefit under sec 80GG for
    Rs 2000 paid by my.

  19. I works in govt departmet on contract with a cosolidate salary eg 25000/m and lives in a rented house , in an urban area. Am i eligeble for tax relaxation under HRA? What be the tax calculation. Plz help.

  20. our one employee leave in Ahemednagar and service in Thane and he receive HRA and he claim for section 80GG of Ahmednagar’s house in which his family live, the employee leave in Diva junction and he also get benefit of HBA Does he get benefit of Rent of Ahemednagar house under section 80GG

  21. our one employee leave in Ahemednagar and service in Thane and he receive HRA and he claim for rent of that house and he also get benefit of HBA Does he get benefit of Rent of Ahemednagar house

  22. Dear Sir

    I am living at a place provided by my employer but paying penal rent Rs. 4860 PM. The usual rent is Rs. 360 PM.

    Do I get exemption from income tax on the amount paid towards penal rent to employer.I mean any rebate on it.

  23. i am getting HRA which part of total income is taxable u/s 80gg is hra recived deducted form gross salary after that on balance amount the below formula is applicable or any other mathod of exemption of hra u/s 80gg

    (d) He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG. In other word eligibility will be least amount of the following :-

    1) Rent paid minus 10 percent the adjusted total income.
    2) Rs 2,000 per month.
    3) 25 percent of the adjusted total income.

    regards
    kuldeep

  24. What about a retired person living on pension.? Do they get exemption u/s 80GG for rent??

  25. if the residence owned by spouse and rent paid to him, against receipt, is it possible to get the exemption….

  26. tax exempt in the case of h.r.a. What is meant by salary? is it BASIC+GRADE PAY+D.A.+SPECIAL PAY ? OR WHAT ?

  27. I am a govt employee and me & my family staying in a rented house. The rent agreement is in my husband’s name. So can I show the rent receipt for tax deduction?

  28. Yes Suhas, you are right. 80GG is for self employed individuals who don’t have a house.

    But I don’t think that this section is of much use unless govt. revises the 2000 p.m. limit.

  29. Dear sir,

    Rent Paid
    80GG deduction is for employee only or for 80GG for for self employed doing business and having no residence ( rented house is home cum bosiness offfice)
    Can such assesse cliam deduction u/s 80GG

    Becacuse for employee specify HRA deduction is given IT Act.
    What about such assesse ?
    Pls do needful.
    Suhas