Section 80GG

Section 80GG of the Income Tax Act lets you claim tax deduction on rent you pay—even if you don’t get HRA (House Rent Allowance) from your employer.

In simple words:

If you pay house rent but don’t get HRA, you can still save tax using Section 80GG.

Who Can Claim Deduction Under Section 80GG?

You are eligible if:

• You are salaried or self-employed
• You do not receive HRA
• You (or your spouse/children) do not own a house in the city where you live
• You live in rented accommodation

Maximum Deduction Allowed

You can claim the least of the following three:

1. ₹5,000 per month (i.e., ₹60,000 per year)
2. 25% of your total income (excluding long-term capital gains, etc.)
3. Actual rent paid – 10% of total income

Simple Example

Let’s say:

• Your total income = ₹4,00,000
• Rent paid = ₹8,000/month = ₹96,000/year
• 25% of income = ₹1,00,000
• Rent – 10% of income = ₹96,000 – ₹40,000 = ₹56,000

So, the deduction will be ₹56,000 (whichever is least among ₹60,000, ₹1,00,000, and ₹56,000)

How to Claim 80GG Deduction

1. File Form 10BA (a declaration that you don’t own a home)
2. Show rent receipts or rent agreement as proof
3. Claim the deduction in your Income Tax Return under Section 80GG

Important Notes

• If your employer gives you HRA, you cannot claim 80GG
• You must live in a rented house—owning a home in the same city makes you ineligible
• You can claim it every year if eligible

Real-Life Example

Ravi is a freelancer living in Delhi on rent, paying ₹7,000 per month. He doesn’t get HRA. Using Section 80GG, he files Form 10BA and claims a deduction, helping him reduce taxable income and save tax.