#Budget 2016- Rationalization of limit of deduction allowable in respect of rents paid under Section 80GG

The existing provisions of Section 80GG provide for a deduction of any expenditure incurred by an individual in excess of ten per cent of his total income towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence if he is not granted house rent allowance by his employer, to the extent 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, subject to other conditions as prescribed therein.

In order to provide relief to the individual tax payers, it is proposed to amend section 80GG so as to increase the maximum limit of deduction from existing Rs. 2000 per month to Rs. 5000 per month.

These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years.

Clause 38 To Finance Bill 2016

Clause 38 of the Bill seeks to amend section 80GG of the Income-tax Act relating to deductions in respect of rents paid.

The aforesaid section provides that deduction is allowable on the expenditure incurred by an assessee in excess of ten per cent. of his total income towards payment of rent upto a maximum of 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.

It is proposed to increase the maximum amount of deduction allowable under the said section to five thousand rupees per month.

This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to assessment year 2017-2018 and subsequent years.

Amendment of section 80GG.

In section 80GG of the Income-tax Act, for the words “two thousand rupees”, the words “five thousand rupees” shall be substituted with effect from the 1st day of April, 2017.

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14 responses to “Deduction Limit U/s. 80GG for Rent raised to Rs. 5000 Per Month”

  1. sarfraz ahmad says:

    Sir I am received the HRA In Rs.59600. But not deduct of my Salary.so i can fill the 80GG in Rs.59600. And i am received the medical allowance of Rs 10000/. But no deduct of my salary So can i Fill medical expenditure of Rs 13500? plz replay

  2. kumar says:

    I am a bank employee, I have leased accommodation and getting only Rs: 3800/- from bank and I am paying Rs: 6000/- as rent.
    Can I use the diff amount in 80GG as I am not getting any HRA?

  3. rattan chand says:

    i am getting 600rupees/moth hra from my employer.and paying rent 4000/month can i get deduction under80gg

    • Madhu sudana Reddy.K(CA Final) says:

      No. you have already getting HRA from your employer.So once HRA received,this sec 80gg was not applicable.

  4. SUDARSHAN says:

    My friend has already filed ITR1 without showing allowances without exemption details. But gross salary shown. Is it required to revise the return.

  5. SUDARSHAN says:

    I HAVE PENSION SALARY AND I AM STAYING WITH MY CHILDREN. I DO NOT HAVE HRA INCOME NOR I AM PAYING RENT. KINDLY CLARIFY WHETHER I CAN CLAIM DEDUCTION UNDER SECTION 80GG WITH THE MAXIMUM AMOUNT OF RS.5000/- PER MONTH

  6. B Vikas kumar says:

    My income is 302400 Per Annum and tax deposited 30240 for whole year and I am not getting any HRA and paying 5000 rent per month. What is deduction under 88 gg
    Please explain me detaily with example

  7. r. M. Ghetiya says:

    My income is 485000 pa and I am not getting HRA and paying 5000 rent pm. What is deduction under 88 gg

  8. Vicky says:

    My income is 300000 n am paying 5000 pm rent and am not getting hra what is deduction us 80gg

  9. Buddhadeb pal says:

    1.12*4=48000-65000=-17000
    2.650000*25%=65000
    3.5000*12=60000

    Adjusted income 650000
    rent paid 4000 pm

    Deductible amount????????
    0 or -17000 ???????
    please answer me,,, very argent???

  10. veda says:

    I have own house, but now I am in rental basis for the purpose of children studies. Is it possible to deduct my actual rental amount?

  11. Punit says:

    I am paying rent for whole year. In FY 2017-18 I recived HRA 7 month with my previous employee and next 5 month in am not getting HRA with my new employee. can i get benifit of HRA exemption for 7 month and rent benefit for 5 month.

    • Vivek says:

      Yes u can claim HRA for 7 months and rent paid for balance 5 months u/s 80GG, provided u / ur spouse / children doesnt own any other residential property.

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