Section 80GG provides a tax deduction to individuals paying rent for their accommodation but not receiving House Rent Allowance (HRA) from their employer. This section is especially helpful for self-employed individuals or salaried employees who don’t get HRA as part of their salary.
🧾 Who is Eligible?
To claim deduction under Section 80GG, the following conditions must be satisfied:
👤 Individual taxpayer (HUFs and companies are not eligible).
🏠 The individual should not be receiving HRA from the employer.
🧳 The individual must be either self-employed or salaried without HRA component.
📍 The person, their spouse, minor child, or HUF should not own any residential accommodation at the place where they are residing or working.
🏘️ If the person owns any house property elsewhere, they must not claim it as self-occupied (it should be let out or deemed let out).
📅 When is Deduction Allowed?
🔸Deduction is allowed only for the period during which rent is paid and all conditions under Section 80GG are fulfilled.
🔸Allowed in the financial year in which the rent is paid, based on actual payments made.
💳 Mode of Payment
🔸Rent must be paid through bank transfer, cheque, draft, UPI, etc. to maintain traceability.
🔸Cash payments (if made) should be supported with proper rent receipts, but digital payment is always recommended for better documentation.
📜 Relevant Provisions
🔸Governed by Section 80GG of the Income Tax Act, 1961.
🔸Also linked with Rule 11B of the Income Tax Rules, which prescribes the conditions and declaration form.
🔸Form 10BA must be filed by the assessee to claim deduction. It is a declaration that the taxpayer satisfies all the conditions of this section.
Documents Required
🔸Rent receipts with landlord details (including PAN if rent > ₹1,00,000 per annum)
🔸PAN card of landlord (mandatory if annual rent > ₹1 lakh)
🔸Proof of rent payment (bank statement, UPI, etc.)
🔸Duly filled Form 10BA (can be filed online via Income Tax portal)
🧮 Calculation of Deduction Amount
The least of the following three is allowed as a deduction:
✅ ₹5,000 per month (i.e., ₹60,000 per year) – as per latest Finance Act, 2025.
✅ 25% of the total income (i.e., Gross Total Income minus long-term capital gains, short-term capital gains under section 111A, and deductions under sections 80C to 80U except 80GG).
✅ Actual rent paid minus 10% of total income (as defined above).
Example:
