80gg

Home rents can be burdensome, especially in urban areas. Since the demand for rented property is comparatively high, the amount charged for rent is also rising gradually. A person’s monthly earning gets impacted in case he/she has a house on rent but receives no House Rent Allowance (HRA). Section 80GG of the Income Tax Act, 1961 offers a deduction on the rent amount every year. Want to know more about this Section? Read along! What is Section 80GG of the Income Tax Act? Chapter VI-A of the Income Tax Act mentions Section 80GG, which allows a deduction on the rent of an unfurnished or furnished house. The provision includes residential houses only. The deductions denote the cost that can be subtracted from the annual gross income to get the taxable income upon which the tax will be imposed. Individuals often try to incorporate tax-saving options in their Also Read: Who Can Claim Section 80GG Deductions? An individual must satisfy the following conditions to claim deductions: • HUFs (Hindu Undivided Family) and sole individuals are eligible to claim 80GG deductions. Businesses or companies cannot get similar tax benefits against rent in a fiscal year. • Self-employed individuals or salaried professionals can also benefit from this provision. However, one who doesn’t have a source of income cannot get a tax advantage. • People wishing to avail of the 80GG deduction can submit a duly filled in Form 10BA to the Government of India. This declaration form ensures that an individ...

Table of Contents • • • • • • What is 80GG Deduction? 80GG Deduction is one of the deductions allowed under Chapter VI-A of the Income-tax Act to the taxpayer to enjoy the tax benefit for the rent paid. The accommodation may be furnished or unfurnished. However, there are specific eligibility criteria or conditions to avail of this tax deduction. Eligibility to Avail Deduction under Section 80GG You are eligible to claim income tax deduction under section 80GG if you satisfy the below criteria. • You are a salaried person but there is no HRA component in your pay slip. • You are a salaried person who is not availing House Rent Allowance (HRA) under section 10(13). • You run your own business. • You or your spouse should not own any residential accommodation at the place where you currently live. • You should not be receiving rental income from owning a property anywhere else. Now that we have seen who is eligible to claim the Deduction under section 80GG, we will calculate the 80GG amount. 80GG Calculation You can claim least of the below three amounts: • Rental expenses of Rs 5,000 per month • 25% of your gross total income before tax deduction. • Actual rent paid by you less 10% of adjusted total income. Example of 80GG Deduction for AY 2020-21 Calculation Let’s see an example to understand how to calculate the 80GG amount. Suppose Rahul earns Rs 8,00,000 per year and pays a monthly rent of Rs 10,000. He also has a tax deduction of Rs 1,50,000 under section 80C and Rs 5,...

Individuals who generallylive and work in the cities from rented houses are allowed an allowance called the House Rent Allowance or HRA to reduce their taxes. This component is part of the salary structure and maybe the whole or partial amount available as a deduction under the HRA head. The HRA allowance is claimed on rental expenses of accommodation. When you live in your own house and not in rented accommodation, this component of your salary is fully taxable. What is section 80GG of Income Tax Act? The Sec 80GG is also called the rent paid deduction in income tax.This was under the old tax regime before the Goods and Services Tax (GST) was implemented. Under the new tax regime, for filing Income Tax Returns or ITRfrom the AY 2021-2022 or FY 2020-2021, tax exemption on HRA is unavailable. Mrs Nirmala Sitharaman, our Finance Minister, announced the new tax regime for taxpayers in the Union Budget applicable to this financial year. The new income tax regime brings in many changes, and the biggest one is that many of the tax exemptions or deductions available under the old regime are unavailable in the newer one like HRA. But what happens under the old tax regime to taxpayers who earn a salary but have no HRA component in the salary? When no HRA is received, and a taxpayer makes a rental payment for unfurnished or furnished accommodation occupied by you on rent, you can claim a tax deduction under U/S Sec 80GG of Income Tax Act 1961. Conditions to claim80GG of income taxde...

Home rents can be burdensome, especially in urban areas. Since the demand for rented property is comparatively high, the amount charged for rent is also rising gradually. A person’s monthly earning gets impacted in case he/she has a house on rent but receives no House Rent Allowance (HRA). Section 80GG of the Income Tax Act, 1961 offers a deduction on the rent amount every year. Want to know more about this Section? Read along! What is Section 80GG of the Income Tax Act? Chapter VI-A of the Income Tax Act mentions Section 80GG, which allows a deduction on the rent of an unfurnished or furnished house. The provision includes residential houses only. The deductions denote the cost that can be subtracted from the annual gross income to get the taxable income upon which the tax will be imposed. Individuals often try to incorporate tax-saving options in their Also Read: Who Can Claim Section 80GG Deductions? An individual must satisfy the following conditions to claim deductions: • HUFs (Hindu Undivided Family) and sole individuals are eligible to claim 80GG deductions. Businesses or companies cannot get similar tax benefits against rent in a fiscal year. • Self-employed individuals or salaried professionals can also benefit from this provision. However, one who doesn’t have a source of income cannot get a tax advantage. • People wishing to avail of the 80GG deduction can submit a duly filled in Form 10BA to the Government of India. This declaration form ensures that an individ...

Individuals who generallylive and work in the cities from rented houses are allowed an allowance called the House Rent Allowance or HRA to reduce their taxes. This component is part of the salary structure and maybe the whole or partial amount available as a deduction under the HRA head. The HRA allowance is claimed on rental expenses of accommodation. When you live in your own house and not in rented accommodation, this component of your salary is fully taxable. What is section 80GG of Income Tax Act? The Sec 80GG is also called the rent paid deduction in income tax.This was under the old tax regime before the Goods and Services Tax (GST) was implemented. Under the new tax regime, for filing Income Tax Returns or ITRfrom the AY 2021-2022 or FY 2020-2021, tax exemption on HRA is unavailable. Mrs Nirmala Sitharaman, our Finance Minister, announced the new tax regime for taxpayers in the Union Budget applicable to this financial year. The new income tax regime brings in many changes, and the biggest one is that many of the tax exemptions or deductions available under the old regime are unavailable in the newer one like HRA. But what happens under the old tax regime to taxpayers who earn a salary but have no HRA component in the salary? When no HRA is received, and a taxpayer makes a rental payment for unfurnished or furnished accommodation occupied by you on rent, you can claim a tax deduction under U/S Sec 80GG of Income Tax Act 1961. Conditions to claim80GG of income taxde...

Table of Contents • • • • • • What is 80GG Deduction? 80GG Deduction is one of the deductions allowed under Chapter VI-A of the Income-tax Act to the taxpayer to enjoy the tax benefit for the rent paid. The accommodation may be furnished or unfurnished. However, there are specific eligibility criteria or conditions to avail of this tax deduction. Eligibility to Avail Deduction under Section 80GG You are eligible to claim income tax deduction under section 80GG if you satisfy the below criteria. • You are a salaried person but there is no HRA component in your pay slip. • You are a salaried person who is not availing House Rent Allowance (HRA) under section 10(13). • You run your own business. • You or your spouse should not own any residential accommodation at the place where you currently live. • You should not be receiving rental income from owning a property anywhere else. Now that we have seen who is eligible to claim the Deduction under section 80GG, we will calculate the 80GG amount. 80GG Calculation You can claim least of the below three amounts: • Rental expenses of Rs 5,000 per month • 25% of your gross total income before tax deduction. • Actual rent paid by you less 10% of adjusted total income. Example of 80GG Deduction for AY 2020-21 Calculation Let’s see an example to understand how to calculate the 80GG amount. Suppose Rahul earns Rs 8,00,000 per year and pays a monthly rent of Rs 10,000. He also has a tax deduction of Rs 1,50,000 under section 80C and Rs 5,...