80GG - Deduction in paid House Rent. Deduction under Chapter VI-A of the 80GG as per the Income-tax Act, 1961. It has been introduced to provide relief to people who do not receive any house rent allowance but are paying rent for living. Thus, a person can claim a discount for the rent paid even if he does not receive a house rent allowance.
A person must be self-employed or salaried to claim a deduction under this section. 80GG allows individuals to claim deductions in the case of rented houses. Renting such a house would be for his own stay.
Exemption under section 80GG
The following conditions must be met to claim a deduction under this section:
That person should not receive any house rent allowance from his employer.
The person has submitted a declaration in Form No. 10BA.
• A member should not own any residential home property in the place where he normally resides or performs office duties or is the cause of his business or profession.
• The appraiser should not own any residential accommodation in his / her own profession, in any other place, the value of which shall be determined in accordance with Sec 23 (2) (a) or Section 23 (4) (a).
Simply put, if Mr. A, in his income tax return, claims a deduction in the case of self-occupied property and pays rent for a place where he normally resides but not his own, he cannot claim deduction under the 80GG section.
The deduction amount will be the lowest of the following:
Subtract 10% of the total income paid for actual rent.
• 5,000 / - per month.
Total adjusted 25% of total income.
Exceptions under Section 80GG:
A person cannot claim a deduction for rent if the location of the house where he/she works or runs a business.
A person cannot claim a deduction for rent if he claims the benefits of the house he owns as self-acquired property elsewhere. If the person lives in one city and has a house in another place or city, it will be considered rent.
Any person who lives in their home with his parents, he/she can claim the benefit of rent deduction as per Section 80GG. To deduct the rent he has to make a rental agreement with the parents. However, the mother and father who own the home must show the rent as income on their tax return. If the house is jointly owned by the son/daughter, they cannot claim the benefit of rent deduction on their taxable income.
Frequently Asked Questions of Section 80GG
What is the total income collected under section 80GG?
Total income refers to income which is not including long-term and short-term capital gains. Here, only those short-term capital gains that are taxed at 10% of 111A will be excluded.
Also, adjusted gross income means income without deductions from 115A to 115D and 80C to 80U.
Combined gross income means: -
Total gross income is subject to tax at 10 deductions under sections 80C to 80U from foreign companies under low long-term capital gains and short-term capital gains.
Note that 80GG from 80C to 80U will not be included in the above cuts.
What details need to be submitted to claim deduction under 80GG?
The details required for submission are:
The appraiser’s name
Pan Card Number
Postal is the complete address of the premises including the postal code
Term (in months)
The means of payment
Pay that amount
Land The name of the landlord
The landlord's address.
The landlord's PAN is mandatory if the rent is more than Rs. 1 lakh for the assessment year.
A declaration confirming that any other home property is owned by the taxpayer in his own name or in the name of his spouse / minor or owned by HUF.
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