Section 80GG of the Income Tax Act, 1961, provides a deduction for individuals who pay house rent but do not receive House Rent Allowance (HRA) from their employer. This benefit is available to both salaried individuals (without HRA) and self-employed persons, provided they, their spouse, minor child, or HUF do not own any residential property at their place of work or residence.
✅ Who is eligible?
You can claim this deduction if all the following apply:
- You pay rent for residential accommodation.
- You don’t receive HRA (House Rent Allowance) or any Rent‑Free Accommodation from your employer.
- Neither you, your spouse, nor minor child—or your HUF—owns a residential property at your workplace, business location, or anywhere else where you’re employed.
- If self-employed or salaried without HRA, you must file Form 10BA, declaring eligibility.
- This deduction applies only under the old tax regime (new regime doesn’t allow HRA or 80GG exemptions).
📐 How much can you claim?
The deduction is the least of the following three amounts
1. ₹5,000 per month (₹60,000 annually)
2. 25% of your adjusted total income (gross total income minus long‑term and STCG, and deductions under 80C–80U, except 80GG)
3. Actual rent paid – 10% of adjusted total income
Example:
- Adjusted income: ₹5,00,000
- Annual rent: ₹1,80,000
- ₹5,000 × 12 = ₹60,000
- 25% of ₹5,00,000 = ₹1,25,000
- ₹1,80,000 − 10% of ₹5,00,000 (₹50,000) = ₹1,30,000
Deduction allowed: ₹60,000
🧾 Documentation & filing
To claim:
- Submit Form 10BA (online via Income‑Tax e‑Filing site), retained for future reference.
- Keep rent agreement, rent receipts, landlord PAN (if rent > ₹1 lakh/year).
- Maintain evidence of actual rent paid (bank transfers/receipts).
No immediate submission is required; these must be provided if the tax department issues a notice.
🔄 Old vs New Tax Regime
- Old regime: You can claim Section 80GG if conditions are met.
- New regime: Not Available
📝 Step-by-step claim process
- Opt for old tax regime when filing (if not opted already).
- Calculate adjusted total income by excluding specified gains and deductions.
- Compute the three possible deduction figures and pick the lowest.
- Fill Form 10BA online and keep proof.
- Claim the deduction in ITR: report under Chapter VI-A.
🔍 Important reminders
- You can’t claim both HRA and 80GG for same period.
- Owning a second property disqualifies you.
- Even if staying with family, pay rent and document it to claim — the rent payer must show it as income.
✅ Summary Table
| Condition | Requirement |
|---|---|
| Employment type | Salaried (no HRA) or self‑employed |
| Residential property ownership | Must not own at workplace or other locations |
| Regime | Old tax regime only |
| Deduction limit | Min of (₹5,000 × months), (25% adjusted income), (rent − 10% adjusted income) |
| Documentation | Form 10BA, rent agreement & receipts, landlord PAN, bank proofs |
FAQs
Q1. Who can claim deduction under Section 80GG?
✔ Any individual paying rent for residential accommodation, who does not receive HRA from their employer and does not own residential property at the place of work.
Q2. Is Section 80GG deduction available to self-employed individuals?
✔ Yes, both salaried individuals (without HRA) and self-employed individuals can claim deduction under Section 80GG.
Q3. Can I claim this deduction if my spouse owns a house?
✔ No, if your spouse, minor child, or HUF owns a residential property at your place of residence/work, you are not eligible.
Q4. Can I claim both HRA exemption and 80GG?
✔ No, if you receive HRA and claim exemption for it, you cannot claim deduction under 80GG for the same period.
Q5. How much deduction is allowed under Section 80GG?
✔ The deduction is the least of the following:
- ₹5,000 per month (₹60,000 annually)
- 25% of adjusted total income
- Actual rent paid minus 10% of adjusted total income
Q6. What is ‘adjusted total income’ for 80GG purposes?
✔ Adjusted total income = Gross total income minus:
- Long-term capital gains
- Short-term capital gains (taxed at special rates)
- All deductions under Chapter VI-A (except 80GG)
- Incomes like 115A, 115AC, 115AD incomes
Q7. Is filing Form 10BA mandatory for claiming 80GG?
✔ Yes, Form 10BA declaration must be submitted online before claiming 80GG deduction.
Q8. Can I claim 80GG if I live with my parents and pay them rent?
✔ Yes, provided you have a proper rent agreement, receipts, and your parents show rent as income in their ITR.
Q9. Is Section 80GG deduction available under the new tax regime?
✔ No, 80GG is available only under the old tax regime.
Q10. What documents are required to claim 80GG deduction?
✔ You should keep:
- Rent agreement
- Rent receipts
- Landlord’s PAN if annual rent exceeds ₹1,00,000
- Form 10BA submission proof
-
Bank transfer evidence of rent payment