80GG is an exemption under chapter VI-A of the Income Tax Act of 1961. It was introduced to help
those individuals who do not receive any rental allowance but pay rent for their stay. Thus, a person
can claim a deduction from the rent paid, even if they do not receive a housing allowance.
A person to qualify for a deduction under this section must be self-employed or earning a wage. 80GG allows individuals to claim a deduction from paid housing rent. This paid house rental will be for your own residence.
80GG deduction
To qualify for this section, the following conditions must be met:
An individual should not receive any housing allowance from their employer.
An individual submitted an application on Form No. 10BA.
Download and Prepare at a time 50 Employees Form 16 Part B for the F.Y.2021-22
The defendant or his spouse or minor child, or the HUF of which he is a member, must not own any residential property in the place where he or she habitually resides or performs official functions, or practices his business or profession.
The appraiser shall not own any dwelling in his own dwelling elsewhere, the value of which shall be determined in accordance with section 23(2)(a) or section 23(4)(a).
Simply put, if d. If you are claiming a deduction for an independent property on your income tax return and you are paying rent for a place where you normally live but which you do not own, you will not be able to claim a deduction below 80GG.
The residue quantum must be the smaller of the following:
Actual rent paid minus 10 % of the total adjusted rent.
5000r - per month.
25% of total adjusted income.
Exceptions under Section 80GG:
- An individual cannot claim a house rent deduction if the location of the house is where he/she works or does business.
Download and Prepare at a time 50 Employees Form 16 Part A&B
for the F.Y.2021-22
An individual cannot claim a housing rent deduction if they claim ownership of the housing as a separate property elsewhere. If an individual lives in one city and has a house in another locality or village, it will be considered rented.
If an individual lives with his father and mother in his home, he may qualify for a rent deduction under section 80GG. He/she will need to enter into a lease agreement with his/her parents in order to receive a rent deduction. However, the home-owning mother and father must report the rent as income on their tax returns. If the house is jointly owned by the son/daughter, they cannot claim the rent deducted from their taxable income.
Frequently Asked Questions on Section 80GG
1. What is 80GG Adjusted Gross Income?
Adjusted total income refers to income that excludes long-term and short-term capital gains. Only short-term capital gains, which are taxed at a rate of 10% in accordance with section 111A, should be excluded here.
In addition, adjusted total income refers to income less income from 115A to 115D and deductions from 80C to 80U.
Adjusted total income means:
Total gross income minus long-term capital gains minus short-term capital gains subject to tax at the rate of 10% less deductions under sections 80C-80U less foreign company income.
It should be noted that 80GY should not be included in deductions above 80C to 80U.
2. What information do I need to provide to claim the u/s 80GG deduction?
Data to be sent:
Appraiser name
PAN
Full address of the property along with postal code
Ownership (in months)
Payment method
Amount paid
Owner's name
lessor's address.
The owner's PAN is mandatory if the rent exceeds INR 1 lakh for the assessment year.
A declaration confirming that no other residential property is owned by the taxpayer himself or in the name of the spouse/minor child or HUF of which he is a member.
