Section 80GG of Income Tax - Deduction on account of Rent paid

SECTION 80GG - DEDUCTION ON ACCOUNT OF RENT PAID

In the case of an employee who resides in rental premises for his employment, generally, HRA is provided by the employer and the employee gets a deduction in respect of rent paid out of the HRA as per the rules of Income Tax.

However, there are cases, where an individual does not get HRA from his employer and resides in rental premises due to his employment at the place.

In respect of those assessee, Section 80GG of the Income Tax Act provides a deduction in respect of rent paid.

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Conditions for claiming 80GG deductions:

The deduction is subject to certain conditions :

(a) The individual, his/her spouse, or minor child should not own any residential house property at the place where he ordinarily resides and also at the place where he is employed.

(b) Individual should also not own any house at any other place the income of which is determined as per Section 23 of the Income-tax Act i.e. as a self-occupied property

(c) The Individual should not receive any HRA from the employer during the year

Limit of 80GG deduction:

The deduction is limited to the least of the following :

(a) Excess of rent paid over 10% of total income

(b) Rs.5000/- per month

(c) 25% of total income (excluding long-term capital gains, short-term capital gains under Section 111A, and Income under Section 115A or 115D and deductions under 80C to 80U) but before allowing deduction under this section.

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