Deduction for Rent Paid Under Section 80GG - In Detaild

Deduction for Rent Paid Under Section 80GG, Deduction for rent paid u/s 80GG, Section 80GG Deduction for Rent Paid, Deduction under section 80GG in respect of rent paid for accommodation, There are some sections in the income tax act at which most people don't pay much attention because they happen to be useful in very few cases. Section 80GG of the income tax act can be said as one of such sections.

Section 80GG Short Information

Deduction towards rent paid for house & applicable to only those who are self-employed or for whom HRA is not part of Salary

Least of the following shall be allowed as deduction

Rent paid reduced by 10% of Total Income before this deduction

₹ 5,000 per month

25% of Total Income (excluding long term capital gains, short term capital gains under section 111A or income under section 115A or 115D)

Please Note: Form 10BA to be filled for claiming this deduction.

Deduction for Rent Paid Under Section 80GG

As per income tax act 1961 if a person has not claimed any deduction towards the rent paid for his accommodation under any other section then he can claim the same using 80GG. For this some more conditions need to be fulfilled as :

(1) The individual is not receiving house rent allowance from his employer or his salary does not include house rent allowance which qualifies for exemption under section 10 (13A) of the Act then he is eligible to claim tax deduction for your house rent expense that were incurred for his living during the previous year.

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(2) Individual files a declaration in Form No. 10BA.

(3) At the place where he ordinarily resides or performs duties of his office or carries on his business or profession he doesn't have ownership of

any residential accommodation himself or by his spouse or minor child or the HUF which he is a part doesn't owned any residential accommodation.

(4) At any other place
any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

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Deduction Under section 80GG :

deduction under section 80GG of income tax act, 1961 is allowed to the extent of the least of following :

(1) Rent paid in excess of 10% of total income*

(2) 25% of total income*

(3).Rs 5000 per month.

If the assessee owns a house in some other city and use that house for his own accommodation and has not given it for rent then he can not claim deduction under section 80GG even though he stays in a rented house and pay rent at the location where he performs his office duties.

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*Total income :

(A) Gross Total income : XXXX

Less :

(B) All Long term capital gains. XXXX

(C) Short capital gains which attract tax at 10%. XXXX

(D) Deductions under sections 80c to 80 u excluding 80GG. XXXX.

****Total income. XXXXX

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Example :

For example Mr Pramod earns an amount of 10 lakhs per annum by way of his employment where he doesn't get any HRA as a part of his salary and satisfied all the conditions as mentioned above, having a long Term capital gain 50,000 arising on sale of an asset and invested 100000 under Sukanya samridhi yojana and he pays a monthly rent of 10000 for his accommodation.

Gross total income. = 10,00,000

(-)Long term cap gain = 50,000

(-)Deduction for Sukanya samridhi yojana investment = 100000

Total income for the purpose of 80GG = 8,50,0000.