80GG Deductions

ExpressITR || 80GG Deductions in Respect of Rent Paid


What is Section 80GG?

Section 80GG of the Income Tax Act in India provides deductions for house rent paid by individuals who do not receive House Rent Allowance (HRA) as part of their salary.

Eligibility for Section 80GG Deduction
  1. Applicability: Section 80GG is applicable to both salaried and self-employed individuals.
  2. Conditions: Business owners and professionals are eligible to claim deductions under this section.
  3. Exceptions: Individuals residing in property owned by themselves or their parents cannot claim this benefit.

Section 80GG Deduction Calculation
The deduction allowed under Section 80GG is the least of the following:
  1. ₹5,000 per month (₹60,000 annually).
  2. 25% of the total income (before deductions under this section).
  3. Actual rent paid minus 10% of the total income (before deductions under this section).
Example
  1. Total Income Before Deduction (Gross Total Income): ₹8,96,200
  2. Rent Paid: ₹1,20,000
Calculation:
  1. ₹5,000 per month = ₹60,000 annually.
  2. 25% of total income: ₹8,96,200 × 25% = ₹2,24,050.
  3. Actual rent less 10% of income: ₹1,20,000 - (10% of ₹8,96,200) = ₹1,20,000 - ₹89,620 = ₹30,380.
Deduction: The lowest amount among the three is ₹30,380.


Steps to Claim Section 80GG in ITR
  1. Go to the Deductions section in the ITR form.
  2. Click the down arrow next to 80GG and enter your rent details.
      
  1. Generate the computation and verify your eligibility for deductions.
      

Clarifications
  1. If I am claiming HRA, can I also claim Section 80GG?
    1. No, if you claim HRA, you cannot claim deductions under Section 80GG. Only one benefit can be availed: HRA or Section 80GG.
  2. Can salaried individuals claim this deduction?
    1. Yes, but only if they do not receive HRA as part of their salary.
  3. What is "total income" for Section 80GG?
    1. It is the total income before allowing any deductions under this section.
  4. Can I claim Section 80GG deduction under the new tax regime?
    1. No, deductions under Section 80GG are only available under the old tax regime.
Notes
For more details, refer to the Income Tax Act: Income Tax Act, 1961.

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