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 Under Section 80GG.

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 (Rs. 5000/- wef F.Y. 2016-17), 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 (Rs.5000/-wef F.Y. 2016-17).

3) 25 percent of the adjusted total income.

The deduction under section 80GG 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.

Section 80GG rent paid

 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

Section – 80GG, Income-tax Act, 1961-2014

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 [five] 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.

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(Republished with Amendments))

House Rent Allowance (HRA) Taxability & calculation

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154 responses to “Section 80GG Deduction on Rent paid”

  1. veerendar says:

    Can a person staying in a rented house but not on monthly rent but on a lease for 5years with a total amount of 1500000 .can I claim rent deduction u/s 80GG with a notional rent or a fair rent equating a percentage of interest lost on the amount invested with the landlord..

  2. subbarao says:

    Sir, I have a query as same:
    Que 1: rent paid by me is more than the rental income earned by me, am I eligible for 80GG and how much?

    Que 2: My parents residing in different city and they constructed 2nd floor for which I am paying the loan/interest, though loan is on my Father’s name and I am the only son. He is retired employee. Please let me know in this case , if I am eligible for applying house interest deduction?

  3. Ashish Kumar Bichpuria says:

    Mam, Your article is impressive. Mam I am working big brand steel industry. My salary is 100000/- month. I have faced some problems regarding HRA.

    1 Case: When I am residing “Alone” outside company’s colony and paid rental amount of Rs.8000/- month. I have own one house in other city where my family resides. I have also taken home loan. Company given HRA benefit of Rs.5000/- and mention in Form 16. In ITR House property column can I mention “Self Occupied”? If I have mentioned “ Letout” in ITR can I show the rental amount and pay the tax?
    2 Case: When I am residing “Alone” in a Company’s “Bachelor Hostel” and Company deducts an amount of Rs.5000/- month. Company does not provide any HRA benefit and also not shown that amount in Form 16. I have own one house in other city where my family resides. I have also taken home loan. In that case my salary is Rs.100000 – 5000 = Rs.95000/-month. Can I claim or taken benefits from 80 GG? Also in ITR House property column can I mention “Self Occupied”? If I have mentioned “ Letout” in ITR can I show the rental amount and pay the tax?
    3 Case: When I am residing “Alone” in a Company’s “Family Accommodation or 2 BHK Furnished Flat” and Company deducts an amount of Rs.5000/- month. Company does not provide any HRA benefit and also not shown that amount in Form 16. I have own one house in other city where my family resides. I have also taken home loan. But some points Company mention in Form 16 as given below.
    Salary 95000/- * 12 = 1140000/-
    Perquisites = 60000/-
    Total = 120000/-
    In that case also my salary is Rs.100000 – 5000 = Rs.95000/-month.
    Can I claim or taken benefits from 80 GG? Also in ITR House property column can I mention “Self Occupied”? If I have mentioned “ Letout” in ITR can I show the rental amount and pay the tax?
    4 Case: Same as in case 3 only difference is that I have Two own house in different city and my family resides there. If I have mentioned “ Letout” in ITR can I show the rental amount and pay the tax?

    Kindly suggest me and provide me exact solution of my problem.

  4. Muneendra Sharma says:

    Dear Sir, I have my own house and I am claiming HOME LOAN benefits as per income tax rule. I was also claiming HRA under 80 GG as I was living in another city for official purpose.

    This financial year I have been transferred to the location which is 45 Km away from the location where my home is situated but my office comes in different district and homes in another.

    I have taken small rented house too near by my office for convenient , can I claim HRA ?

  5. ankit Shah says:

    What to do if 1st condition goes nagative balance.

    that is rent paid minus 10% total income.

  6. ANIL KUMAR SHARMA says:

    how to claim 80Gg deduction

  7. shailesh kumar says:

    Sir
    I want to do NGO`s 80g online what can I do?
    Please explain….

  8. Satish Kini says:

    The rent paid by me is more than the rental income earned by me.

  9. Satish Kini says:

    I am retired person living on pension. I have rented out my own 1bhk and moved to 2bhk on rent. I am showing my rental income in ITR with relevant deductions. Can I claim benefit under section 80gg for the rent paid by me for my present rental house.

    • Vinod Kumar says:

      I am retired person living on pension. I have a DDA flat acquired after availing HBA from Government but so far neither I am residing there due to low inhabitancy & feeling other difficulties nor it has been rented out. Now I am residing in rented accommodation for which I am paying Rs. 13000/- p.m. Can I claim benefit under section 80gg for the rent paid by me for my rental house.

  10. Prasanto Mahato says:

    I am not getting any HRA from employer and my monthly salary is 60000/-. I am paying monthly House rent 6500/- . m I eligible to claim HRA if I am not getting any HRA from employer.

    • Surajit Chattopadhyay says:

      I am a Government employ and received HRA but stay in a rented house with excess money then HRA. In which section can I exempt from Tax and How much? I am from Bankura WB.

  11. C K Ogra says:

    We are retired couple both getting pension
    We are living with our daughter who is a house wife.we have a house in other city which is rented.
    Can we claim minimum Rs.5000 per month in section 80 GG while computing the tax.

  12. Shoran Singh Warkade says:

    I have received HRA in railway I have claim sec.80GG in tax or not.

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