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Deduction under Section 80GG for payment of Rent

80GG allows the individuals to claim a deduction in respect of house rent paid. 80GG is a deduction under Chapter VI-A of the Income Tax Act, 1961. It has been introduced to provide relief to those individuals who do not receive any house rent allowance but are paying rent for the stay. 

Eligiblity to Claim Tax Deductions under Section 80GG:

  • Deduction is applicable to eligible salaried and self-employed professionals.
  • Individual and HUF are allowed exemption under this section.
  • A company cannot claim house rent deductions.
  • The taxpayer himself or his spouse or Minor Child or HUF of which he is a member should not own any accommodation at the place where he is employed or carries on his business or profession.
  • Assessee need to fill and submit Form 10BA to declare that he is not claiming benefit of Self-Occupied Property on a house in any other location or in the same location as he is employed.
  • Non-resident Indians are also eligible to claim tax benefits under this provision.

Deduction under Section 80GG:

Quantum of deduction shall be the least of the following:

  • Actual Rent paid minus 10 percent the adjusted total income.
  • 5,000/- per month.
  • 25% of Adjusted Total Income

The maximum deduction allowed under Section 80GG is Rs 60,000 per annum which means Rs 5000 per month.

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Note: This Post was last updated on January 23, 2023

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