80GG is a deduction under Chapter VI-A of the Income Tax Act 1961. This section provides relief to those taxpayers who are not in receipt of house rent allowance (HRA) but pays rent for their residential purpose.
This document covers
- Conditions to be satisfied for claiming deduction u/s 80GG
- Amount of deduction available u/s 80GG
- Example for Computation
- Form 10BA and its contents
- How to file form 10BA ?
1. Conditions to be satisfied for claiming deduction u/s 80GG
The following conditions needs to be satisfied for claiming deduction u/s 80GG
- The taxpayer should not be receiving any house rent allowance exempt u/s 10(13A) from the employer
- The house should be occupied by the assessee for his own residence
- The expenditure incurred by the taxpayer on rent of any furnished or unfurnished residence should exceed 10% of his total income arrived at after all deductions under chapter VIA
- The taxpayer or his spouse or his minor child or an HUF of which he is a member should not own any house at the place where he ordinarily resides or perform duties of his employment
- If the assessee owns any residence at any place other than referred to above, such residence should not be in occupation of the taxpayer
- The taxpayer should file a declaration in the prescribed form confirming the details of rent paid and fulfilment of other conditions along with income tax return
2. Amount of deduction available u/s 80GG
The deduction will be the least of the following.
- Actual Rent paid (-) 10% of the total income of the taxpayer before allowing the deduction.
- 25% of total income (Gross income-deduction u/s Chp VIA except 80GG)
- 5000 per month
3. Example for Computation
Mr Ram, a businessman, has a gross total income of Rs 460000. He is paying a rent of Rs 12000 per month. What is the amount of deduction available u/s 80GG?
- Actual rent paid (-) 10% of total income: (12000*12)- (10%*460000) = 98000
- 25% of total income: 460000*25%= 115000
- 5000 per month= 60000
As Rs 60000 is least of above, 60000 is the deduction u/s 80GG.
4. Form 10BA and its contents
If the taxpayer wants to claim deduction u/s 80GG, he/she needs to submit form 10BA in Income tax e-filing portal as a supporting document. The following are the details in form 10E.
- Name of the taxpayer
- PAN of the taxpayers
- Previous year
- Address of residential house
- No of months
- Mode of payment (Cash/bank/cheque)
- Landlord name and Address
The taxpayer claiming deduction towards rent paid u/s 80GG should submit Form 10BA in Income Tax portal before ITR eFiling. Otherwise rent paid u/s 80GG will be disallowed as deduction
5. How to file form 10BA ?
- Login to https://www.incometax.gov.in/iec/foportal/
- Go to e-file Menu > Income Tax Forms > Form 10BA
- Enter the details requested in the form and click to submit
- The below is the format of 10BA
Sample Form No 10BA