Explore the intricacies of Section 80GG, offering tax deductions for rent paid by individuals without HRA. Understand eligibility, limits, and filing requirements for FY 2025-26.
What is Section 80GG Deduction?
Eligibility for Claiming Deduction Under Section 80GG
Maximum Deduction Limit under Section 80GG
Form 10BA Requirement
FAQs on Section 80GG
Section 80GG provides tax relief for individuals paying rent without receiving HRA.
Purpose of Section 80GG
This section is designed to benefit individuals who incur rental expenses but do not receive HRA.
Applicable to individuals paying rent for residential accommodation.
Available to both salaried (without HRA) and self-employed individuals.
Only applicable under the old tax regime.
Key Features
Understand the core aspects of Section 80GG.
Deduction is available only if the taxpayer does not own a residential property in the city of employment.
The taxpayer or their spouse/minor child should not own any other residential property.
Form 10BA must be filed to claim this deduction.
Worked Example
Illustration of tax savings with Section 80GG.
Assume an individual with an annual income of ₹6 lakh.
Rent paid is ₹8,000 per month, totaling ₹96,000 annually.
Deduction calculation: ₹60,000 (₹5,000 per month limit) or 25% of total income (₹1.5 lakh) or actual rent minus 10% of income (₹36,000). The lowest is ₹36,000.
Eligibility criteria to claim deductions under Section 80GG.
Basic Eligibility
Criteria to qualify for the deduction.
The taxpayer should not receive HRA at any time during the financial year.
Applicable only under the old tax regime.
The taxpayer must reside in the rented accommodation.
Property Ownership Restrictions
Ownership conditions affecting eligibility.
The taxpayer should not own a house in the city where they reside.
No ownership of any other residential property by the taxpayer or their family.
Applicable to members of a Hindu Undivided Family (HUF) as well.
Filing Requirements
Documentation and filing necessities.
Form 10BA must be submitted to claim the deduction.
The form should be filed before the due date of the Income Tax Return (31st July 2026 for FY 2025-26).
Accurate details of rent paid and landlord information are mandatory.
Understand the limits on deductions under Section 80GG.
Deduction Calculation
How the deduction is calculated.
The deduction is the least of the following three amounts.
₹5,000 per month or ₹60,000 annually.
25% of the total income before the deduction.
Actual Rent Paid
Consideration of actual rent in deduction.
Actual rent paid minus 10% of total income.
This calculation ensures only genuine rental expenses are deducted.
Helps in preventing inflated deduction claims.
Worked Example
Illustration of deduction calculation.
Assume a taxpayer with an annual income of ₹5 lakh.
Rent paid is ₹7,000 per month, totaling ₹84,000 annually.
Deduction calculation: ₹60,000 (₹5,000 per month limit) or 25% of total income (₹1.25 lakh) or actual rent minus 10% of income (₹34,000). The lowest is ₹34,000.
Filing Form 10BA is essential for claiming deductions under Section 80GG.
Purpose of Form 10BA
Form 10BA is a declaration for claiming rent deduction.
Confirms compliance with Section 80GG conditions.
Must be filed online through the Income Tax Department's portal.
Ensures transparency and accuracy in deduction claims.
Details Required
Information to be provided in Form 10BA.
Name and PAN of the assessee.
Full address and rent details of the accommodation.
Landlord's name, address, and PAN if rent exceeds ₹1 lakh annually.
Filing Deadline
Timely submission of Form 10BA is crucial.
Form must be filed before the ITR deadline (31st July 2026 for FY 2025-26).
Late filing may result in denial of deduction claims.
Ensure all information is accurate and complete.
Who can claim deductions under Section 80GG?
Individuals paying rent for residential accommodation without receiving HRA can claim deductions under Section 80GG. This applies to both salaried (without HRA) and self-employed individuals under the old tax regime.
What is the maximum deduction available under Section 80GG?
The maximum deduction is the least of ₹60,000 annually, 25% of total income, or actual rent paid minus 10% of total income. For example, if your annual income is ₹5 lakh and rent paid is ₹84,000, the deduction would be ₹34,000.
Is Form 10BA mandatory for claiming Section 80GG deductions?
Yes, filing Form 10BA is mandatory to claim deductions under Section 80GG. It serves as a declaration of compliance with the conditions for rent deduction and must be filed before the ITR deadline.
Can I claim Section 80GG if I own a house in another city?
Yes, you can claim Section 80GG if you own a house in another city, provided you do not own a residential property in the city where you reside and work.
What happens if I miss the Form 10BA filing deadline?
Missing the Form 10BA filing deadline may result in the denial of your deduction claim under Section 80GG. Ensure timely submission to avoid losing out on tax benefits.
Can HUF members claim deductions under Section 80GG?
Yes, members of a Hindu Undivided Family (HUF) can claim deductions under Section 80GG, provided they meet the eligibility criteria and do not own residential property in the city of residence.
Is Section 80GG applicable under the new tax regime?
No, Section 80GG deductions are only available under the old tax regime. The new tax regime does not allow for this deduction.
How do I calculate the deduction amount under Section 80GG?
Calculate the deduction as the least of ₹60,000 annually, 25% of total income, or actual rent paid minus 10% of total income. Use the lowest value for your deduction claim.
What if my rent exceeds ₹1 lakh annually?
If your rent exceeds ₹1 lakh annually, you must provide the landlord's PAN in Form 10BA to claim the deduction under Section 80GG.
Can I claim both HRA and Section 80GG deductions?
No, you cannot claim both HRA and Section 80GG deductions. Section 80GG is specifically for individuals who do not receive HRA.