Section 80GG Deduction for Rent paid

Salaried Individuals get tax benefit in form of HRA (House Rent Allowance exemption)

Similar benefit is not available to others like those in business.

For these,deduction for rent paid is available under Section 80GG.

Amount of Deduction

Deduction allowed is lower of following-

     (a) Rent paid – 10% of  Total income

     (b) 25% of  Total income

     (c) Rs 2000 p.m

Here

Total income =

Gross total income

Less

All other deductions (under chapter VIA)

Examples

Q1

An assessee, whose total income is Rs. 46,000,

paid house rent at Rs. 1,200 p.m. in respect of residential accommodation occupied  by him at Mumbai. 

Compute the deduction  allowable under section 80GG.

Conditions to be fulfilled to Claim Deduction

• He must be an individual
• He must be paying rent for his residence
• He should not be claiming HRA 
• He must not be claiming Deduction for Self Occupied Property under House Property
• He should not own Residential accommodation at a place where he lives or where he works or where he does Business. Also his spouse / minor child / HUF of which he is a member should not have house at such place.
• He should file declaration in prescribed from with his return in form 10BA