All salaried are very much familiar with HRA and how to get the benefit of the rent they pay. However, what about those who not get HRA in their salary or for self employed? Will they still get rent benefit? The answer to both the questions is Section 80GG of Income Tax.
So as I said above this section only
applies to those who have not availed HRA in their salary or not claiming the
deduction on their rent in any of the other sections of income tax. Below
are a few conditions to avail the deduction under this section.
- This
section is only applicable to Individual or HUF.
- Tax
Payer may be either salaried or a self-employed. However, must not be
getting HRA.
- Tax
Payer himself or spouse/Minor Child/HUF of which he is a member should not
own any accommodation at a place where he is doing a job or business.
- If
Tax Payer owns house at a place other than the place noted above, then the
concession in respect of self occupied property is not claimed by him
[Under Section 23 (2) (a) or 23 (4) (a)].
- Tax
Payer has to file a declaration in Form
No.10BA regarding the expenditure incurred by him towards
the payment of rent.
How
much amount of deduction one can avail under Sec. 80GG?
If the above
five conditions are satisfied, the amount deductible under Section 80GG is LEAST OF THE
FOLLOWING.
- Rs.2,
000 per month;
- 25%
of total income of taxpayer for the year; or
- Rent
Paid less 10% of total income (Rent Paid-10% of Total Income).
So least of the above will be Rs.24, 000, which one can
claim under Section 80GG.
