Section 80GG allows a deduction for rent paid for furnished or unfurnished accommodation. The deduction is allowed to taxpayers who do not receive any House Rent Allowance (HRA) from their employer.
What are the conditions to claim a deduction for rent paid u/s 80GG?
- Only an independent individual can claim deduction u/s 80GG.
- An individual can be salaried or self-employed.
- In the case of a salaried person, he should not be receiving House Rent Allowance (HRA) from an employer.
- For claiming a deduction, Form-10BA needs to be submitted with the IT Department.
- Assessee or his spouse or minor child or HUF of which he is a member should not own any residential accommodation at the place where he is residing/performing office duties under-employment/carrying business or profession
- The assessee should not own a house property at any place, for which income is calculated as income from self-occupied house property.
What is the deduction limit u/s 80GG?
For FY 2018-19 (AY 2019-20), Deduction under section 80GG will be the least of following:
- Total rent paid less 10% of total income
- 25% of the annual salary
- Rs. 5000 per month i.e Rs. 60,000 annually
You can claim deduction under section 80GG if you own a residential house property subject to following conditions:
– You or your spouse or children should not own a house property at your ordinary place of residence or office or employment; or
– You should not own a self-occupied house property anywhere in India.
So if you own a residential house property but it is given on rent then you can claim deduction under section 80GG for rent paid.
Yes. You can claim a deduction for rent paid up to Rs. 60,000 even if you are self employed.
Only an individual can claim deduction for rent paid under this section.