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Claim Tax Benefit for Rent Paid u/s 80GG

Section 80GG - Avail Tax Benefit on Rent Paid

Section 80GG is one of lesser known sections which can be used by taxpayers to lessen their tax burden by claiming tax exemption for rent paid (in case HRA is not part of salary). This section can be used by be either salaried/pensioner or self-employed tax payers.

Conditions for Claiming Tax benefit u/s 80GG for Rent Paid

You can claim tax deduction on rent paid u/s 80GG at the time of filing tax return only if following conditions are satisfied:

The deduction is available only for individuals & HUFs
For salaried person to be eligible for tax benefit u/s 80GG, he should not receive HRA from his employer.
Pensioners or Self employed do not have any HRA and so they can take advantage of 80GG
No one in the family including spouse, minor children, self or HUF he is member of should own a house in the city you are employed or carrying your business.
If you own a house in different city, you cannot show it as self-occupied. You have to consider it as deemed to let out – i.e. – you have to show rental income whether or not it’s actually put on rent.

Additionally, you need to fill form no 10BA to claim tax benefit u/s 80GG. This form is NOT to be submitted anywhere but kept with you for records to show to I-T department in case of scrutiny.

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Form 10BA to claim Tax deduction on Rent paid – Section 80GG

Deduction allowed u/s 80GG:

The House Rent deduction is minimum of the below 3 numbers:

Rs. 5,000 per month [increased from Rs 2,000 to Rs 5,000 in Budget 2016]
25% of annual income
(Rent Paid – 10% of Annual Income)

Here Annual income refers to

Gross Total Income

Minus

Long Term Capital Gain,
Short Term Capital Gain of 10% category,

Deductions under sections 80C to 80U except section 80GG and income of foreign company

Also Read: Best Tax Saving Investments

Illustrative Calculation u/s 80GG

Assume that Amit has annual income of Rs 5 Lakhs and he pays rent of Rs 10,000 per month. Here is his tax benefit for rent paid.

Rs. 5,000 per month – Rs 60,000
25% of annual income – Rs 1,25,000
(Rent Paid – 10% of Annual Income) – Rs 70,000 (1,20,000 – 50,000)

The tax deduction would be minimum of above 3 numbers = Rs 60,000

80GG in Income Tax Return Form

Tax exemption under section 80GG is part of Chapter VI A and has to be filled as you do for Section 80C in the ITR Forms.

Also Read: 11 Tax Free Components You Must have in Salary

Can HRA & 80GG Tax benefit be claimed Together?

In case you were salaried receiving HRA for some part of the financial year but paid rent for the entire year, you can claim benefit under both HRA & Section 80GG. For the period you received HRA, you should claim tax benefit on that through your employer. For rest of months you would get tax benefit u/s 80GG.

Amit

Hi Readers! I am Amit, the mind behind Apnaplan.com I am MBA from NITIE, Mumbai and BIT from Delhi University. This blog is my online diary where I write about my tryst with my investment decisions. In the 400+ posts on this blog you will find articles on Personal Financial Planning, Investments, Retirement Planning, Insurance, Loans, Fixed Deposits, Provident Funds, Stock Markets, Gold, Silver, Real Estate Investment, Credit Cards, Credit Score, Taxation, Inheritance Planning and Reviews on various Financial Products.

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View Comments

SAHOO says:

March 18, 2020 at 9:47 pm

I am a pensioner. Own a house and it is rented. I am showing rent as income. Also paying house rent as staying in a rented house. Rent paid 1.80 lac. Annual income from all sources 9.00 lac. What amount allowed under section 80GG.
REETURANI BOHIDAR says:

February 14, 2020 at 4:32 pm

Hi sir
My mother in law is pensioner and also getting family pension and also she is residing with us. Is she can claim benefits of 80GG for FY 2019-20
- Ratan Sarraf says:
  
  February 27, 2020 at 3:49 pm
  
  No, She can't claim deduction U/S-80GG.
  (Section applies where you are a tenant and paying Rent)
Anupam says:

July 29, 2019 at 10:06 am

Hi Amit,

My mother is pensioner and having income from pension 500000 Per anuum. This income is from bank interest received on FDs. Can you confirm can she claim HRA ?
- sushilgoyal says:
  
  June 16, 2023 at 6:45 pm
  
  my pension is 480000 and interest from saving225000 and 20000 other income my gross income is 725000 my saving is 109000 asppf can i claim hra under sectiò80gg
CHENGAIAH M says:

July 22, 2019 at 3:59 pm

Hi Amit
I am pensioner but idonot have any house in my name.My wife is homemaker.House is in her name. Am I eligible to claim under80gg house rent ?.pl comment.
- sushilgoyal says:
  
  June 16, 2023 at 6:59 pm
  
  hello amit i am pensioner my gross income from pension and interest and other income is rs 726000/_ and my saving is 109000 as ppf can i claim benfits of 80gg as house rent
Rajesh Verma says:

June 11, 2019 at 1:44 pm

Hi Amit,

My mother is pensioner and having income from pension 500000 Per anuum. Income from FDs is 320000 PA. Can you confirm can she claim HRA ?
prakash c r says:

March 17, 2019 at 1:40 pm

hallo Amit,

I am prakash. I own a house in my single name in a non-metro. I have a home loan for the same and the same is given for rentals also. Iam staying in a separate rental house for the convenience of my old mother's treatment, children education etc. Iam showing the rentals as well as claim deductions for interest for home loan for tax purpose. Am i eligible for exemption of Rs 5000/- per month(lowest eligible) under Sec80GG also as rent paid in the tax. Iam a pensioner of age 60 years.
tks and regards
- Amit says:
  
  April 29, 2019 at 5:59 pm
  
  If you own a house you cannot claim 80GG deduction
Nandan Kumar Deb says:

March 7, 2019 at 3:34 pm

Sir, l am not drawing hra but paying house rent for my family staying in a rented house for children education.
Please intimate whether l am eligible for exemption under 80gg and is it out of ₹150000/-
- Amit says:
  
  March 8, 2019 at 12:19 pm
  
  Yes you can get tax benefit u/s 80GG and its not related to 1.5 lakhs benefit u/s 80C
Nikhil Chandra Das says:

January 28, 2019 at 4:05 pm

hello sir, i have booked a flat in my city with taken a bank loan on january'18. but till date promoter is not in condition to handover the flat. as well as i already stay a rented house and paid in cash @ Rs. 9000.oo per month and also paid bank loan as time to time (Monthly basis). at this situation can i availed HRA Exempted as per IT Rule and deduction of loan interest paid to bank during this financial year. please specify.
thanking you
YASH PORWAL says:

October 28, 2018 at 12:36 pm

Iam a salaried person i don't get HRA although my company has reimbursed 15000 per month for the rent, can i claim under this section.
satish kumar says:

October 15, 2018 at 12:45 pm

Sir,
My daughter is a teacher.She was not getting HRA till 23-9-2018.On change of job, she started drawing HRA from 24-9-18 She satisfied all the eligibility conditions under section 80GG but upto 23-9-18 only..Kindly guide how should she work out deduction under section 80GG for the period 1-4-18 to 23-9-18..Figures for entire FY 18-19 are detailed below:-
Rent paid: Rs.156000 @Rs.13000 per month,Income from other sources:Rs.1300000,income from salary:388214,HRA for the period 24-9-18 to 31-3-19 :Rs21979 ,,PPF: Rs150000,Mediclaim insurance premium:Rs.17000.
Salary for the period 1-4-18 to 23-9-18:Rs.145098