80gg deduction

• • • • • What is House Rent Allowance (HRA)? House Rent Allowance (HRA) is paid by an employer to employees as a part of their salary to meet the accommodation expenses. Salaried individuals who live in rental premises can claim exemption of House Rent Allowance u/s. 10(13A). Employees are required to submit the rent receipts to their employers to claim the tax benefit. The employers, in turn, will calculate exempt House Rent Allowance and deduct the same from the employee’s From FY 2020-21 onwards, House Rent Allowance Exemption is only available if an employee opts for the Old Tax Regime. HRA Exemption rules and Calculation The amount of Exempt HRA will be the least of the following amounts: • Actual House Rent Allowance received • Actual rent paid less than 10% of salary • 50% of salary if you live in a metro city/ 40% in case of a non-metro city (Here Salary includes – Basic Salary + Dearness Allowance) The House Rent Allowance calculation formula has been explained below with the help of an example: Let’s understand with an example: Raj works in a company in Ahmedabad. He lives in a rented flat. He pays INR. 15,000/month as rent. Following is his salary structure: Particulars Amount (In INR) Basic Salary 5,00,000 House Rent Allowance 1,75,000 25,000 Other Allowances 12,500 Gross Salary 6,15,000 Actual Rent Paid 1,80,000 The least of the following will be the exempt House Rent Allowance: • Actual House Rent Allowance = INR 1,75,000 • Actual Rent Paid (-) 10% of Basic ...

ગુજરાતી • • • • • • • New • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Live • Live • • • • • • • • • • • • • • • • • • • Section 80GG is a specific provision under Chapter VI-A of the Income Tax Act of 1961 that gives tax relief to persons who do not claim housing rent allowance. A person must live in a rented home in order to be qualified for a tax deduction under this section. Additionally, his or her company shouldn't include a house rent allowance (HRA) in the monthly salary. Professionals who are entitled for a salary and self-employment deduction may use Section 80GG. As a result, everybody who owns a business is eligible to claim this particular tax deduction, just like their colleagues who earn a salary. What is 80GG? Section 80GG of the Indian Income Tax Act is a deduction applicable on the rent you pay if you do not receive House Rent Allowance (HRA) from your employer. The maximum deduction is Rs. 5,000 per month or 25% of your total income, whichever is lower. Self-employed or salaried employees can claim this deduction by submitting a Form 10BA declaration with their income tax return. Those who own residential property in the same city where they work or conduct business are not eligible for the deduction. Who is Eligible to Claim Tax Deductions under section ...

In general, the employee who is receiving ‘House Rent Allowance’ has a benefit of claiming an available exemption under section 10 (13A) of the Income Tax Act. However, there can be a situation, wherein, the individual (either self-employed or a salaried person) would not be receiving House Rent Allowance, but, is paying rent for his own residence. In such a situation, such specific individual, who is not receiving House Rent Allowance, can claim the benefit of deduction available under section 80GG of the Income Tax Act, 1961. The provisions of the said deduction are taken up and explained in the existing article. A person eligible for claiming deduction under section 80GG Deduction under section 80GG is available only to an individual who has not received House Rent Allowance (i.e. HRA) at any time during the year. List of conditions to be fulfilled for claiming deduction under section 80GG – Following is the list of conditions which an individual need to fulfil in case he is willing to claim deduction under section 80GG of the Income Tax Act – • In order to claim deduction under section 80GG, the individual should not be receiving ‘House Rent Allowance’ at any time during the year. • Deduction is available in respect of any furnished or unfurnished accommodation, however, it is important that the same rented accommodation should have been occupied by the assessee for his own residence. • Neither individual himself nor his spouse or minor child or HUF of which he is a me...

When you earn income, you are liable to pay tax on it. The Income Tax Act, 1961 governs the laws related to the payment of tax in India. The act has multiple provisions that help you reduce your tax liability. One of the commonly known sections is 80C, which allows tax exemptions of up to INR 1.50 lakhs per year if you invest in eligible instruments. However, there are other sections that are also beneficial in reducing your tax liability. One of these is section 80GG. Read on to know more about it. What is Section 80GG? It is a special provision under Chapter VI-A of the Income Tax Act, 1961. It was introduced as a relief for taxpayers who paid rent but did not receive house rent allowance (HRA). This section allows them to claim deduction on the rent paid even if they are not receiving HRA. Income tax deductions under section 80GG Tax Rule 2A governs the deductions under section 80GG of the Income Tax Act, 1961. The deduction is the lowest of the following: • 25% of your total adjusted annual income • INR 5,000 per month or INR 6 lakhs per year • Annual rent minus 10% of your total adjusted income Here is an example to understand the deduction. Assume your annual total adjusted income is INR 10 lakhs and the monthly rental is INR 23,000. Here is the calculation of the amounts based on the three aforementioned rules: Rule Amount (INR) 25% of total adjusted annual income 2,50,000 Yearly rent paid 2,76,000 Annual rent – 10% of total adjusted income 1,76,000 The 80GG deducti...

Usually, HRA forms part of your salary, and you can claim deduction for An individual should reside in a rented property and not own property in the same city to claim a deduction under Section 80GG. If the employer provides a Home Rent Allowance (HRA) as part of the monthly salary, an individual will not be eligible to claim a deduction under this section. Section 80GG deduction is applicable to salaried and self-employed professionals. Thus, if an individual is a business owner, he/she will be eligible to claim tax deductions under this section. Individuals residing on their parents' property, which they own, are also eligible to claim Section 80GG benefits. However, such individuals should sign a rental agreement with their parents and give rent to them. The rental amount paid to their parents will be taxable when they file their ITR. Eligibility for claiming deduction under Section 80GG A taxpayer must fulfill the following conditions to claim deduction under Section 80GG: • You are self-employed or a salaried individual. A Hindu Undivided Family (HUF) can also claim the deduction. However, businesses cannot claim this deduction. • You have not received HRA from an employer at any time during the year for which you are claiming 80GG. The HRA component should not form part of your salary to claim 80GG. • You have not received HRA from an employer at any time during the year you claim 80GG. The HRA component should not form part of your salary to claim 80GG. • You, your ...

Claim Deduction on Rent Paid under Sec 80GG Under Sec 80GG of Income Tax Axt 1961, individuals can claim This section 80GG provides house rent deduction on fulfilling certain conditions, which we will discuss in this article. • It is for the Individuals who do not get HRA in their salary, including self-employed and professionals who do not earn wages. An individual or a HUF can claim it. • It is not for those individuals who get HRA in their salaries. It is an essential component of wages. Employers give it to their employees to accommodate expenses on rent paid. HRA in salaries is claimed under another section of income tax 10(13A). It can be partially or fully claimed based on your actual expense on rent. If you get HRA in your salary and are not living in a rented space, the HRA component of your salary is fully taxable. To claim rent paid deduction under section 80GG, the following conditions exist: • You, your spouse, minor child or HUF should not own a residential house in any place where you are employed, operate your business or profession or in any other city where you are claiming the benefit of a self-occupied house. • It means the use of claiming a tax deduction for claiming repayment of interest and principal of the home loan and claiming 80GG together is not possible. • If you own a house in another city, it is treated as rented out. • While claiming tax 80GG deduction under this section, you must fill and submit form 10 BA, which states you satisfy the firs...

A ubiquitous component of most salary slips, house rent allowance (HRA) is a benefit that even financially not-so-savvy individuals are well aware of. Consequently, the exemptions linked to HRA are also commonly known. Despite this, however, certain lesser-known aspects of HRA-related tax exemptions can come as unpleasant surprises at the time of filing returns. Your chartered accountants could enquire about documentary proofs or worse, the income tax department could send notices seeking further details. Also read: Simply Save | ITR filing - Know all the tax benefits linked to home loans and HRA Claim HRA benefits while filing returns Salaried individuals rarely miss out on claiming HRA exemptions while filing their investment declarations to their employers. If you have failed to submit the required proofs in time, however, chances are that your employer would have withheld TDS (tax deducted at source) on the HRA component of your salary. In such cases, you can claim the HRA exemption while filing returns. The tax-exempt HRA will be the lower of 50 percent (40 percent if you live in a non-metro city) of your basic salary plus dearness allowance, if any, or the actual HRA or the actual rent paid minus 10 percent of your basic salary and dearness allowance. You do not have to submit any documents at the time of filing your income tax return. However, you must preserve your rent receipts and rent agreements in any case. “If your rent exceeds Rs 50,000 per month, you will ha...

A ubiquitous component of most salary slips, house rent allowance (HRA) is a benefit that even financially not-so-savvy individuals are well aware of. Consequently, the exemptions linked to HRA are also commonly known. Despite this, however, certain lesser-known aspects of HRA-related tax exemptions can come as unpleasant surprises at the time of filing returns. Your chartered accountants could enquire about documentary proofs or worse, the income tax department could send notices seeking further details. Also read: Simply Save | ITR filing - Know all the tax benefits linked to home loans and HRA Claim HRA benefits while filing returns Salaried individuals rarely miss out on claiming HRA exemptions while filing their investment declarations to their employers. If you have failed to submit the required proofs in time, however, chances are that your employer would have withheld TDS (tax deducted at source) on the HRA component of your salary. In such cases, you can claim the HRA exemption while filing returns. The tax-exempt HRA will be the lower of 50 percent (40 percent if you live in a non-metro city) of your basic salary plus dearness allowance, if any, or the actual HRA or the actual rent paid minus 10 percent of your basic salary and dearness allowance. You do not have to submit any documents at the time of filing your income tax return. However, you must preserve your rent receipts and rent agreements in any case. “If your rent exceeds Rs 50,000 per month, you will ha...

Claim Deduction on Rent Paid under Sec 80GG Under Sec 80GG of Income Tax Axt 1961, individuals can claim This section 80GG provides house rent deduction on fulfilling certain conditions, which we will discuss in this article. • It is for the Individuals who do not get HRA in their salary, including self-employed and professionals who do not earn wages. An individual or a HUF can claim it. • It is not for those individuals who get HRA in their salaries. It is an essential component of wages. Employers give it to their employees to accommodate expenses on rent paid. HRA in salaries is claimed under another section of income tax 10(13A). It can be partially or fully claimed based on your actual expense on rent. If you get HRA in your salary and are not living in a rented space, the HRA component of your salary is fully taxable. To claim rent paid deduction under section 80GG, the following conditions exist: • You, your spouse, minor child or HUF should not own a residential house in any place where you are employed, operate your business or profession or in any other city where you are claiming the benefit of a self-occupied house. • It means the use of claiming a tax deduction for claiming repayment of interest and principal of the home loan and claiming 80GG together is not possible. • If you own a house in another city, it is treated as rented out. • While claiming tax 80GG deduction under this section, you must fill and submit form 10 BA, which states you satisfy the firs...

• • • • • What is House Rent Allowance (HRA)? House Rent Allowance (HRA) is paid by an employer to employees as a part of their salary to meet the accommodation expenses. Salaried individuals who live in rental premises can claim exemption of House Rent Allowance u/s. 10(13A). Employees are required to submit the rent receipts to their employers to claim the tax benefit. The employers, in turn, will calculate exempt House Rent Allowance and deduct the same from the employee’s From FY 2020-21 onwards, House Rent Allowance Exemption is only available if an employee opts for the Old Tax Regime. HRA Exemption rules and Calculation The amount of Exempt HRA will be the least of the following amounts: • Actual House Rent Allowance received • Actual rent paid less than 10% of salary • 50% of salary if you live in a metro city/ 40% in case of a non-metro city (Here Salary includes – Basic Salary + Dearness Allowance) The House Rent Allowance calculation formula has been explained below with the help of an example: Let’s understand with an example: Raj works in a company in Ahmedabad. He lives in a rented flat. He pays INR. 15,000/month as rent. Following is his salary structure: Particulars Amount (In INR) Basic Salary 5,00,000 House Rent Allowance 1,75,000 25,000 Other Allowances 12,500 Gross Salary 6,15,000 Actual Rent Paid 1,80,000 The least of the following will be the exempt House Rent Allowance: • Actual House Rent Allowance = INR 1,75,000 • Actual Rent Paid (-) 10% of Basic ...