U/s 80GG, an individual can claim deduction for the rent paid even if he doesn’t get HRA. S. 80GG allows the individual a deduction in respect of house rent paid by him for his own residence.
| Conditions for claiming deduction u/s 80GG: |
| The Taxpayer should be an individual |
| The individual is not in receipt of HRA from his employer |
| The deduction is not available if he owns a residential house property at any other place and he occupies the same. |
S. 80GG provides for deductions for house rent paid, provided that a deduction for payment of house rent has not been claimed under any other section of the income tax act. In other words, if a salaried employee is being given house rent allowance by his employer and he is claiming a deduction from the same, he will not be eligible to claim deduction u/s 80GG for payment of rent.
All other taxpayers who are neither getting benefit of HRA nor have they claimed the expense for rent paid under any other section of the income tax act, can claim deduction u/s 80GG.
| Deduction available is least of: |
| Rent paid minus 10% of total income |
| Rs. 2000 per month |
| 25% of Total income |
Here Total Income means Total income of the assessee before claiming any deduction under this section.
| What is the adjusted total income u/s 80GG? |
| The adjusted total income means :- |
| Gross Total Income |
| Less: |
| Long Term Capital Gain, Short Term Capital Gain of 10% category, Deductions under sections 80C to 80U except section 80GG and income of foreign company. |
Reference:
As Per Section 80GG, of the Income Tax Act, 1961-
Deductions in respect of rents paid.
80GG. In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed two thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations :
Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is—
(i) owned by the assessee or by his spouse or minor child or, where such assessee 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 employment or carries on his business or profession; or
(ii) owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined [under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23].
Explanation.—In this section, the expressions “ten per cent of his total income” and “twenty-five per cent of his total income” shall mean ten per cent or twenty-five per cent, as the case may be, of the assessee’s total income before allowing deduction for any expenditure under this section.