Taxpayers can claim income tax deduction under Section 80GG for any amount paid as rent. In this article, we look at Section 80GG deduction in detail
Under Section 80GG, taxpayers can claim a deduction from gross total income for any amount paid by way of rent of any premises occupied by the taxpayer for the purposes of his/her own residence.
For claiming Section 80GG deduction, the taxpayer must also conform to the following conditions:
- The taxpayer is not in receipt of any house rent allowance (HRA) from his employer which is exempt under section 10( 13A);
- No residential accommodation is 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.
- No residential accommodation is owned by the assessee at any other place, which is in his occupation for the purposes of his own residence.
Amount of Deduction under Section 80GG
The amount of deduction under Section 80GG must be calculated as under:
- Amount spent on rent in excess of 10% of the assessee’s total income before allowing a deduction for any expenditure under this section.
- The deduction will be restricted to lower of the following amounts:
- 25% of the total income of the assessee before allowing a deduction for any expenditure under this section.
- The amount calculated at Rs.5000 per month or Rs.60,000 per year.
To claim deduction under Section 80GG, the taxpayer must file a declaration in Form No.10BA. Taxpayers can prepare and file Form 10BA on the Income Tax E-Filing website. To prepare and file Form 10BA.
Download Form 10BA
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