Deduction on House Rent under section 80GG

The common question arises in the mind of assesee received salary is “I am not receiving any house rent allowance (HRA) but I am paying house rent for Rs. 5,000 per month. Can I allowed for any  deduction from my salary income?”

Yes, you can get deduction on house rent paid even you are not receiving any HRA u/s 80GG subject to some conditions. In this article we will discuss only about deduction under section 80GG. If you are receiving House Rent Allowance then see this article about “ Calculation of House Rent Allowance”

Basically, Deduction under Sec. 80GG is available for persons who are not in receipt of house rent allowance, but have to pay rent for their accommodation in excess of 10 per cent of their total income.

The deduction for the rent paid by you for occupying an accommodation for your residense is allowed as a deduction from total income provided the following conditions are satisfied:

Conditions to get deduction on rent paid

• You should be individual
• You are not receiving any housre rent allowance from the employer (if receiving then see the article)
• A residential accommodation is not owned at the place where you reside or perform the duties of your office or employment. Or by your spouse, your minor child and HUF of which you are a member

Quantum of deduction for rent paid

The deduction shall be the minimum of the following amounts:

• Rs. 2000 per month
• 25 percent of the Adjusted Total Income
• The excess of actual rent paid over 10 per cent of Adjusted total Income

Adjusted Total Income for calculation of deduction u/s 80GG

Adjusted total income, for the purpose, means the gross total income as reduced by:

• Long-term capital gains
• All deduction u/s 80CCC to 80U excepting deduction u/s 80GG
• Any income referred to in section 115A to 115D

Pin-up in your income tax tile for office record

The assessee must fill a declaration in Form No.10BA and pin-in your income tax file for future reference. It is a proof of showing that you have not your own residence accommodation on the place of your employment.

Download Form No. 10BA

Related posts:

1. Calculation of House Rent Allowance (HRA) Exemption
2. Only House Owner can Claim Deduction u/s 80C
3. HRA Exemption as Paying Guest
4. Tax Implications on Second House Property
5. Tax Provisions of Rent Arrears