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Section 80GG Deduction

Section 80GG Deduction is available for taxpayers on rent paid on a residence used for his own purposes. The maximum deduction allowed under Section 80GG is Rs.60,000. Deduction under Section 80GG can be claimed only if the taxpayer has not received HRA from the employer.

Income Tax Deduction for Rent Paid

To claim Section 80GG deduction, the following conditions must be fulfilled by the taxpayer:

HRA Not Received from Employer
The taxpayer must not have received any house rent allowance (HRA) from the employer.
Not a Home Owner
The taxpayer or spouse or minor child must not own a house property. In case of a Hindu Undivided Family (HUF), the HUF must not own a house property where the taxpayer resides.
Form 10BA Declaration
The taxpayer must file a declaration in Form 10BA that he/she has taken a residence on rent in the previous year and that he/she has no other residence.
Income Tax Deduction for Rent Paid

Amount of Deduction under Section 80GG

Maximum deduction under Section 80GG is capped at Rs.60,000. Normally, the deduction under Section 80GG is the lower of the following three amounts:

25% of Adjusted Total Income
Rent Paid minus 10% of Adjusted Total Income
Rs.5000 per Month
Income Tax Deduction for Rent Paid

Form No.10BA

To claim deduction under Section 80GG, the taxpayer must file a declaration in Form 10BA. Form 10BA can be filed online by logging on to the Income Tax E-Filing website. In Form 10BA, the taxpayer must declare the amount of rent paid and the name of the landlord.

Amount of Deduction under Section 80GG

Amount qualifying for deduction shall be the amount spent on rent in excess of ten percent of the assessee’s total income before allowing deduction for any expenditure under this section. Deduction shall be restricted to lower of the following amounts:

  1. 15% of the total income of the assessee before allowing deduction for any expenditure under this section; or
  2. Amount calculated at five thousand rupees per month.

Declaration in Form No.10BA

A declaration in Form No. 10BA has been filed by the assessee as required under rule 11B of the Income-tax Rules, 1962. For filing Form 10BA logon to e-filing website. Goto 'Prepare and Submit Online Form (other than ITR)' under Tab 'e-file'. Select Form 10BA from the dropdown list and proceed to fill in the form and submit.

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