Income Tax Deduction in respect of Rent Paid under Section 80GG of the Income Tax Act, 1961.Section 80GG is applicable to individual salaried taxpayer who is not receiving House rent allowance (HRA) and should not own any residential accommodation. Then individual can claim deduction for rent paid subject to maximum of Rs 2,000/- per month.
Conditions and Calculation for deduction under section 80GG
The taxpayer should be an Individual
The taxpayer is an employee but he does not get house rent allowances during the previous year from the employer
The taxpayer files a declaration in form no. 10BA* regarding the expenditure incurred by him towards payment of rent. : Download Income Tax Form 10BA
The persons (taxpayer, spouse, adopted/minor child or HUF of which the taxpayer is member) should not own any residential accommodation.
Amount of deduction-
Least of the following-
- Rs. 2,000 per month
- 25 % of adjusted GTI
- The excess of actual rent paid over 10% of total income.
- Actual amount paid
|Gross total income|
Less: Long term capital gains
Less: Short term capital gain (at the rate of 15%)(sec.111A)
Less: Income referred to in (sec. 115A or 115D)
Less: Amount deductible (80CCC to 80U)( except 80GG)
|Total income for the purpose of section 80GG|
- If the assessee resides in a concessional house provided by the deduction in respect of rent paid can be claimed under this section.
- The assessee must submit a declaration in Form No. 10BA alongwith the return of income.