Section 80GG of Income Tax Act: Claim Rent Deduction Even If You Do Not Get HRA
Section 80gg of the Income Tax Act: Claim Rent Deduction Even If You Do Not Get HRA
Introduction
Many salaried and self-employed individuals live in rented accommodations but do not receive House Rent Allowance (HRA) from their employers.
Does that mean they cannot claim tax benefits for the rent they pay?
Not at all.
Section 80GG allows taxpayers to claim deductions for house rent even if they do not receive HRA or are self-employed.
What Is Section 80GG?
Section 80GG provides rent deduction for individuals who:
- Do not receive HRA from their employer
- Are self-employed and paying rent for residential accommodation
- Do not own a house in the same city where they reside or work
Unlike HRA under Section 10(13A), this deduction falls under Chapter VI-A and is claimed during income tax return filing.
Conditions to Claim Deduction Under Section 80GG
To claim this deduction, the following criteria must be met:
- You should be salaried or self-employed.
- You should not receive HRA during the financial year.
- You must be paying rent for a residential property you live in.
- You, your spouse, or your minor child must not own any residential house at your place of residence or work.
- If you own a house in another city, it must be shown as let out or deemed to be let out.
- You must submit Form 10BA online before filing your ITR to declare that you meet all the above conditions.
How Much Deduction Can Be Claimed?
The deduction is the lowest of the following three amounts:
- Rs. 5,000 per month (Rs. 60,000 annually)
- 25 percent of your total income (excluding long-term capital gains, short-term gains under Section 111A, and deductions under Chapter VI-A)
- Actual rent paid minus 10 percent of your total adjusted income
Example:
If your annual income is Rs. 6,00,000 and rent paid is Rs. 10,000 per month (Rs. 1,20,000 annually), you can claim only Rs. 60,000 as deduction because that is the lowest of the three limits.
Step-by-Step: How to Claim Section 80GG in ITR
- Log in to the Income Tax e-filing portal
- Go to ‘e-File’ > ‘Income Tax Forms’ > Select Form 10BA
- Enter:
- Name and PAN of landlord (mandatory if annual rent exceeds Rs. 1 lakh)
- Rent amount
- Rental address
- Declaration that you do not own a house at the place of residence
- Submit Form 10BA
- File ITR using ITR-1 or ITR-2 (depending on your income sources)
- Report the deduction under Section 80GG in the Chapter VI-A section
Frequently Asked Questions
Is PAN of landlord required?
Yes, if annual rent exceeds Rs. 1 lakh, landlord’s PAN must be provided in Form 10BA.
Can I claim both 80GG and home loan benefits?
No. If you or your family owns a house in the same city as your work, you cannot claim 80GG—even if you are renting elsewhere.
Is Section 80GG available under the new tax regime?
No. Section 80GG is available only under the old tax regime. It is disallowed under Section 115BAC.
Can NRIs claim 80GG?
Yes. NRIs can claim the deduction, provided they meet all the conditions and are paying rent in India.
Common Mistakes to Avoid
- Not submitting Form 10BA before filing ITR
- Claiming 80GG while also receiving HRA
- Failing to maintain rent receipts or rental agreement
- Providing incorrect income or overstating rent
- Opting for the new tax regime (which disqualifies the deduction)
Final Thoughts from a Chartered Accountant
Section 80GG is a lesser-known but powerful deduction for those who do not receive HRA.
With rising rent costs, this deduction can offer significant tax relief if claimed correctly. However, documentation and proper form filing are critical. Filing Form 10BA and maintaining rent records are mandatory to ensure you do not lose this benefit during scrutiny.
Want to Claim Rent Deduction Without HRA? We Can Help.
At CallmyCA, we assist with:
- Determining your eligibility for Section 80GG
- Filing Form 10BA accurately
- Calculating the maximum deduction
- Filing your ITR with all applicable Chapter VI-A deductions
Click here to book your ITR filing with rent deduction service via CallmyCA
