Deduction for Rent Paid – Section 80GG Income tax Act

Deduction for Rent paid Section 80GG
Deduction for Rent paid Section 80GG

 

Section 80GG allows the  Individuals to a deduction in respect of house rent paid by him for his own residence.

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1. Conditions

a) The Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act;

(b)  the Individual files the declaration in Form No. 10BA.  

(c)  The employee does not own:

(i)  any residential accommodation (himself or by his spouse or minor child or where such Individual  is a member of a Hindu Undivided Family, by such family) at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

(ii)  at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

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2. Amount of Deduction

Deduction shall be provided on least of the following

  1. Rent paid minus 10 percent the adjusted total income.
  2. Rs. 2,000 per month.
  3. 25 percent of the adjusted total income.

Note : Adjusted Total Income can be calculated as follows –

.

Gross Total Income xxxx
Less :
Long Term Capital Gain (xxxx)
Short Term Capital Gain (xxxx)
Deductions under sections 80C to 80U

Except 80GG(xxxx)(xxxx)Adjusted Total Income xxxx

 

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Taxation of House Rental Allowance under Income Tax

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