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Deduction under Sec. 80GG is available for persons who pay rent for their accommodation. In computing total income, an assessee is allowed a deduction in respect of expenditure towards payment of rent for any furnished or unfurnished accommodation occupied by him for the purpose of his own residence provided the following conditions are satisfied: Conditions to be satisfied – 1. He should be a self-employed person and/or a salaried employee who is not in receipt of house rent allowance at any time during the previous year. 2. He or his spouse or minor child (including step child and adopted child) or the HUF of which he is a member, should not own any residential accommodation in India or Abroad. Deduction under section 80GG is denied only where the taxpayer, his spouse or minor child or the HUF of which he is a member, owns any residential accommodation at the place where the taxpayer resides, performs the duties of his office, or employment or carries on his business or profession. Where, however, the taxpayer owns any residential accommodation at any other place and the concession in respect of self occupied property u/s 23(2)(a) or 23(4)(a) is claimed by him respect of such accommodation, no deduction is allowed in respect of the rent paid u/s 80GG even if he does not own any residential accommodation at the place where he ordinarily resides, performs the duties of his office or employment or carries on his business or profession. 3. The assessee should file a declaration in Form No. 10 BA regarding the expenditure incurred by him towards payment of rent. Amount of Deduction – The amount deductible under this section is least of the following amounts: • Rs. 2000 per month; • 25 percent of the Adjusted Total Income • The excess of actual rent paid over 10 per cent of Adjusted total Income Adjusted total income is calculated after excluding long-term capital gain, short term capital gain u/s 111A, and income referred to in Section 115A or 115D and amount deductible under section 80C to 80U but before making any deduction under this section.
Deduction in respect of rent paid – 80GG
Direct Taxes (including International Taxation) | By ALOK PATNIA | Last updated on Oct 5, 2017
Deduction under Sec. 80GG is available for persons who pay rent for their accommodation. In computing total income, an assessee is allowed a deduction in respect of expenditure towards payment of rent for any furnished or unfurnished accommodation occupied by him for the purpose of his own residence provided the following conditions are satisfied: Conditions to be satisfied – 1. He should be a self-employed person and/or a salaried employee who is not in receipt of house rent allowance at any time during the previous year. 2. He or his spouse or minor child (including step child and adopted child) or the HUF of which he is a member, should not own any residential accommodation in India or Abroad. Deduction under section 80GG is denied only where the taxpayer, his spouse or minor child or the HUF of which he is a member, owns any residential accommodation at the place where the taxpayer resides, performs the duties of his office, or employment or carries on his business or profession. Where, however, the taxpayer owns any residential accommodation at any other place and the concession in respect of self occupied property u/s 23(2)(a) or 23(4)(a) is claimed by him respect of such accommodation, no deduction is allowed in respect of the rent paid u/s 80GG even if he does not own any residential accommodation at the place where he ordinarily resides, performs the duties of his office or employment or carries on his business or profession. 3. The assessee should file a declaration in Form No. 10 BA regarding the expenditure incurred by him towards payment of rent. Amount of Deduction – The amount deductible under this section is least of the following amounts: • Rs. 2000 per month; • 25 percent of the Adjusted Total Income • The excess of actual rent paid over 10 per cent of Adjusted total Income Adjusted total income is calculated after excluding long-term capital gain, short term capital gain u/s 111A, and income referred to in Section 115A or 115D and amount deductible under section 80C to 80U but before making any deduction under this section.