Form 10BA : Claim Deduction under section 80GG

What is Form 10BA?

Form 10BA is a declaration to be filed by a taxpayer who wants to claim deduction under section 80GG for rent paid on rental property. In order to claim deduction u/s 80GG following two conditions should be satisfied:

  1. ​The taxpayer should not be receiving HRA from an employer AND,
  2. ​The taxpayer, his spouse, minor child or if the assessee is a member of HUF, then the HUF should not own any self-occupied residential accommodation.

If both the above conditions are satisfied, then the taxpayer can submit a declaration in Form 10BA. A taxpayer should submit Form 10BA before filing ITR.

Other important ITR documents include: Form 16, Form 26AS, Form 12BB, Form 15G & Form 15H.

  • Taxpayer’s Name and PAN,
  • Address of rental property,
  • Rent paid,
  • Name and Address of Landlord.
Need help with filing Form 10BA?
Let our experts file it for you.
[Rated 4.8 stars by customers like you]
Need help with filing Form 10BA?
Let our experts file it for you.
[Rated 4.8 stars by customers like you]

Example

During FY 2019-20, Arun was employed for the first 6 months and after that, he started doing freelancing work. Arun stayed at rented premises during the entire year. During his employment he received HRA. He does not own any self-occupied house property.

In the above scenario, Arun is eligible to claim deduction under section 80GG and can file Form 10BA for the last 6 months’ rent paid by him. Since he was not receiving any house rent allowance during that time and he did not own any self-occupied property.

How to submit Form 10BA?

A taxpayer has to submit the form online from his/her e-filing account on IT Department website.

  1. Go to the Income Tax e-Filing Portal

    Log in to the e-filing account from the e-filing portal.

  2. Navigate to e-file > Income Tax Forms

    It is right next to the My Account tab.

  3. Select FORM NO. 10BA from the drop-down, select the relevant Assessment Year

    Select Submission Mode as Prepare and Submit Online and click Continue.

  4. Enter the details like Name of Landlord, Details of Rent Paid etc.

    Preview and submit

What are the details required in Form 10BA?

Following details are required:

It is advisable to submit Form 10BA before filing income tax return and claiming deduction under section 80GG.

FAQs

Can I claim a deduction on rent paid if House Rent Allowance forms part of my salary?

No. As per primary conditions, you can not claim a deduction on rent paid if you receive an allowance from your employer. In this case, only HRA is allowed as deduction.

I am a freelance and I stay in rented premises, can I claim a deduction under section 80GG and file Form 10BA?

Yes, you can file Form 10BA. Provided you, your spouse, a minor child or your HUF does not own any self-occupied residential accommodation.

When can I claim deduction under section 80GG?

You can claim deduction u/s 80GG while filing your ITR. However, Form 10BA needs to be filed before filing ITR.

Section 80GG – Deduction for Rent

Section 80GG of Income Tax Act allows individuals a deduction for rent paid for furnished or unfurnished accommodation. The deduction is allowed to taxpayers who do not receive any HRA from their employer.

Deduction under section 80GG is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
Tip
Deduction under section 80GG is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime

What are the Conditions to Claim a Deduction for Rent Paid Under Section 80GG of Income Tax Act?

  • 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 self-occupied house property at any place

What is the Deduction Limit Under Section 80GG?

For FY 2018-19 (AY 2019-20), Deduction under this section will be the least of the following:

  • Total rent paid less 10% of total income
  • 25% of the annual salary
  • INR 5000 per month i.e INR 60,000 annually

What is the Exception to Section 80GG?

With respect to claiming deductions under section 80GG there are certain exceptions that one needs to take care of:

  • One cannot claim deduction under section 80GG if he/she is claiming a deduction on a house property that is owned by them in another location
  • One cannot claim deduction u/s 80GG on house rent if one owns a house in the location they are employed in or are doing business in

How is the Deduction Calculated Under Section 80GG?

Below mentioned are the medial authorities who are eligible to issue a disability certificate:

Mr Modi’s annual income is INR 8 lakh and he does not get HRA. He is paying a rent of INR 20,000 per month which is INR 2,40,000 annually. Let us now calculate his deductible income, whichever of the following is lower will be considered as the deductible amount:

Point 1: Total rent paid less 10% of the total income

Rent paid by Mr Modi in total is INR 2,40,000 less 10% of his annual income (INR 8,00,000) is INR 80,000 hence the deductible amount will come to INR 1,60,000 (2,40,000-80,000)

Point 2: 25% of the annual salary

Under this, the 25% of INR 8,00,000 would come to INR 2,00,000

Point 3: INR 5000 per month i.e INR 60,000 annually

Here Mr. Modi can avail INR 60,000 as a deduction amount.

As the condition to claim deduction under section 80GG is that the amount has to be the lowest from the above three, Mr Modi will be able to claim INR 60,000 as a deduction.

Who is eligible to claim deduction u/s 80GG?

Salaried Individuals are eligible if

  • Individuals paying house rent,
  • You don’t receive any House Rent Allowance from your employer,
  • You or your spouse or minor children or HUF in which you are a member do not own residential accommodation at the place of employment,
  • Not owning self-occupied residential accommodation at any other place.
  • You file Form 10BA before you claim the deduction.

Non-Salaried individuals are eligible if

  • Individuals paying house rent,
  • You or your spouse or minor children or HUF in which you are a member do not own residential accommodation at the place of employment,
  • Not owning self-occupied residential accommodation at any other place.
  • You file Form 10BA before you claim the deduction.

What is the threshold limit for claiming deduction u/s 80GG?

The lowest of the following is allowed as a deduction:

  1. Total rent paid less 10% of the total income
  2. 25% of the total income
  3. INR 5,000 per month i.e, INR 60,000 annually.

Let’s understand this with an example: Sharad is a salaried individual who does not receive HRA from his employer and lives in rented premises in Bangalore. Sharad pays INR 20,000 per month as rent for a year and his total income is INR 12,00,000. Neither Sharad nor his wife owns any residential property in Bangalore or at any other place.

In the above case, Sharad will be eligible to claim deduction under section 80GG even though he is a salaried individual. The deduction will be the lowest of the following:

  1. INR 1,20,000 (INR 20,000*12 months – 10% of INR 12,00,000)
  2. INR 3,00,000 (25% of INR 12,00,000)
  3. 60,000 (INR 5,000*12 months)    

Therefore, Sharad can claim a deduction of INR 60,000 for rent paid by him during the year provided he files Form 10BA first.   

ITR Form Applicable for Section 80GG

The taxpayer can claim deductions u/s 80GG while filing ITR by full-filling the above conditions. Individuals/HUFs can claim 80GG in any of the ITR forms, i.e, ITR 1ITR 2ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.

For FY 2019-20, due to COVID-19 the due date has been extended to 31st of December to file the tax audit report and 31st of January 2021 to file the ITR
Tip
For FY 2019-20, due to COVID-19 the due date has been extended to 31st of December to file the tax audit report and 31st of January 2021 to file the ITR

Supporting Documents

Apart from the usual documents like Form 16 and PAN, you will need the following documents:

  • Rent agreement & Rent receipts
  • PAN Details of the landlord, if the rent amount exceeds INR 1,00,000.
  • Filing Form 10BA which ensures that you are not claiming the benefit of self-occupied property in the same or any other location

FAQs

Can I claim deduction u/s 80GG if I own a residential house?

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.

Can I claim a deduction u/s 80GG even if I’m Self employed?

Yes. You can claim a deduction for rent paid up to INR 60,000 even if you are self-employed.

Who can claim a deduction u/s 80GG?

Only an individual can claim deduction for rent paid under this section.

Can I claim 80GG along with my HRA?

No. Deduction under section 80GG is only available to individuals who do not get House Rent Allowance (HRA).

Can I claim 80GG in new tax regime?

No. Section 80GG is part of Chapter VI-A. The New Income Tax regime doesn’t allow any exemptions under chapter VI-A. Hence, you cannot claim section 80GG.