Claim Rent Paid Deduction – 80GG

Deduction for rentA person is living in a house and paying rent for the same. If he gets House Rent Allowance (HRA) then he gets exemption u/s 10(13A). But if he does not get HRA then he can claim deduction u/s 80GG. The following conditions must be satisfied in order to claim deduction under this section-

  • This deduction is allowed only to an Individual.
  • The individual pays rent for his accommodation.
  • The individual is either a self employed or if he is an employee he is not entitled to any HRA.
  • The individual, his or her spouse or minor child or a HUF of which he/she is a member does not own any residential accommodation at the place where he works or carries on his business or profession.

Quantum of Deduction: Deduction shall be restricted to the least of the following –

  • Rent less 10% of Adjusted Total Income
  • 25% of Adjusted Total Income
  • Rs. 2000 p.m.

Adjusted Total Income means Gross Total Income as reduced by Long Term Capital Gains; STCG subjected to STT and all deductions permissible u/s 80C to 80U except 80GG.

For Instance; Mr. A, a business man submits the following particulars for the previous year 2010-2011. a)      Income from House Property at Kolkata – Rs. 30000 b)      Business Income – Rs. 40000 c)      Long Term Capital Gain – Rs. 30000 d)     Deduction u/s 80C – Rs. 12000 He pays Rs. 2000 p.m. as rent for his accommodation in Delhi. Neither, he nor his family owns any residential accommodation. Compute Total income for A.Y. 2011-2012. Solution:


Amount Rs.
Income from House Property


Business Income


Long Term Capital Gain


Gross Total Income


Less: Deduction under chapter VI- A  
         Deduction u/s 80C


          u/s 80GG (note:1)


Total Income


  Note: Deduction u/s. 80GG shall be the minimum of the following three amounts –

  •  Rent less 10% of Adjusted Total Income = Rs. 24,000 – 5,800 = Rs. 18,200
  • 25% of Adjusted Total Income= Rs. 14,500
  • Rs. 2000 p.m.= Rs. 240000

Adjusted Gross Total Income = GTI – LTCG – Deduction u/s 80C to 80U Except u/s 80GG = 1, 00,000 – 30,000-12,000 = Rs. 58,000

2 thoughts on “Claim Rent Paid Deduction – 80GG”

    1. Hi,

      You can claim deductions u/s 80GG while Filing Income Tax Return in the Assessment Year in which you are entitled to claim the deduction. Butthere is no separate procedure of claiming 80GG deduction through online.

      You should file a declaration Form NO. 10BA regarding the expenditure incurred by you towards payment of rent satisfying all other conditions. This document can be used as a proof of claiming deduction while filing the return or can be submitted to AO whenever he wants to examine it.

      Thanks and Regards,
      Team Taxmantra
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