Deduction Under Section 80GG on Rent

Section 80GG of the Income Tax Act: Deduction Under 80GG on Rent Paid

Section 80GG offers a tax deduction on rent paid when HRA is not part of your salary. Know the rules, limits, and how to claim.

Written by : Knowledge Centre Team

2026-01-07

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10 minutes read

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Section 80GG is a deduction under Chapter VI-A of the Income Tax Act. An individual can claim a deduction under 80GG for rent paid if he/she does not get house rent allowance from their employer.

Section 80GG has been introduced to reduce the burden of housing rent. Living on rent has been a necessity for a large section of the working population. When you move around for work, you can’t afford to own houses everywhere. That’s when renting an apartment becomes a necessary expense. If you are salaried, you receive HRA and a tax benefit on it to compensate for your rental expenses. However, if you do not receive HRA or are self-employed, rent for residence could become a burdensome expense. Therefore, income tax offers relief for the rent paid.

Key Takeaways

  • Section 80GG allows a tax deduction on rent paid for your residence if you don’t receive HRA

  • Section 80GG deduction is limited to the lowest of ₹5,000 per month, rent paid minus 10% of adjusted total income or 25% of total income

  • You must submit Form 10BA to claim Section 80GG, along with rent and residence details as required in the declaration

  • ​Eligibility depends on meeting the prescribed ownership-related conditions

  • ​Section 80GG and HRA exemption cannot be claimed together for the same period

What is Section 80GG in the Income Tax Act?

Section 80GG of the Income Tax Act provides relief for house rent paid during a financial year. This deduction is suitable for you as individual and HUF taxpayers especially if you are self-employed.

If you are salaried you are probably getting a monthly HRA (House Rent Allowance). The Income Tax Act, 1961, allows a rebate on this allowance if you are living on rent. However, if you are self-employed or do not receive HRA, and are living on rent, you can claim a deduction under section 80GG.

The deduction under this section will vary based on your salary, rent paid, and city of residence (e.g., tier-I, tier-II, etc.).

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Section 80GG: Who is Eligible to Claim Tax Deductions?

One must meet particular conditions to avail tax deductions under this section of the ITA. Enumerated here are a few of the criteria that an individual must satisfy to claim the Section 80GG deduction.

  • Only individuals and Hindu Undivided Family (HUF) are qualified to claim these tax deductions. Businesses or other companies cannot avail themselves of identical tax discounts by paying rent in a given fiscal year.
  • Salaried professionals and self-employed individuals can also benefit from this provision. If one has no income to the discourse of, they are excluded from endeavouring Section 80GG income tax advantages, even if they pay the rent.
  • Those attempting to avail of this tax deduction must submit a correctly filled Form 10BA to the government before. This form is a declaration covering the non-receipt of HRA and that the person filing it does not claim any privilege from a self-occupied property in any place.
  • Section 80GG of the Income-tax Act is specifically designed for individuals who do not receive a House Rent Allowance from their employers. If an individual's salary exceeds the HRA limit, they are ineligible to claim income tax deductions for housing rent.
  • If the annual rent expense surpasses ₹1 lakh, the taxpayer will have to present a copy of the house owner's PAN card to demand tax benefits supporting Section 80GG of the Income Tax Act.
  • An individual should not have claimed HRA at any time during the fiscal year for which they are claiming the tax benefit under Section 80GG. 
  • Even if a person does not procure HRA for a substantial part of the year, getting the same for only a single month disqualifies them from claiming this yearly reprieve.
  • Individuals residing with their parents in a property owned by their parents are also eligible to claim benefits under Section 80GG. For this, a person would be required to sign a rental agreement with their parents. Further, the amount conferred as rent will be taxable when the parents file their tax returns.
  • Non-resident Indians are also eligible to claim tax benefits under this provision. But they should be handling the rent for a property in India to implement the same.

How to File Form 10BA?

Form 10BA is necessary for individuals who want to gain tax benefits under Section 80GG. It is a declaration that you have taken a house on rent during the relevant period and also that you have no other residence.

Here are a few of the details that a person has to fill in Form 10BA before submitting it:

  • Complete address with postal code
  • Name and PAN number of the assessee
  • Method of payment
  • Duration of residency in months
  • Rental cost
  • Name and address of the property owner
  • Declaration asserting that the assessee, his/her mate, or minor child do not possess any additional residential estate
  • PAN card number of the rented property's proprietor is compulsory if the cost of rent surpasses ₹1 lakh in any provided fiscal year.

 

Where can one get Form 10BA?

These forms are readily available from various sources, including the human resource department in any reputed organisation. One can also obtain the form by visiting tax offices. However, the most convenient place to spot one is online. People can search for and download it from various official websites.

Deduction under Section 80GG of Income Tax Act

You can claim a deduction under section 80GG for the rent paid in the previous year (PY, taxable financial year) as per the terms of section 10(13A).

Section 10(13A) limits the maximum eligible deduction under section 80GG to the least of the following:

  • Rs 5000 per month (Rs 60,000 per year)
  • Rent paid over 10% of the Adjusted Total Income for the PY
  • 25% of the Adjusted Total Income for the year

Adjusted Total Income for Section 80GG

Your Adjusted Total Income is the Gross Total Income for the previous year without the following incomes:

  • Long term capital gains (LTCG)
  • Short term capital gains (STCG)
  • All deductions from Gross Total Income (Section 80C to 80U) except section 80GG
  • Income received as NRI or from a foreign company taxable under sections 115A, 115AB, 115AC or 115AD
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The MoSPI proposes revising the CPI housing index from a biannual, urban-only rent index to a broader rural coverage using HCES data.


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Deduction Under Section 80GG of the Income Tax Act

You can claim a deduction under section 80GG for the rent paid in the previous year (PY, taxable financial year) as per the terms of section 10(13A) (i.e., you do not receive HRA exemption).

Section 80GG allows a deduction for rent paid, limited to the lowest of the following amounts:

  • ₹5000 per month (₹60,000 per year)
  • Rent paid over 10% of the Adjusted Total Income for the PY
  • 25% of the Adjusted Total Income for the year

 

Adjusted Total Income for Section 80GG

Your Adjusted Total Income is the Gross Total Income for the previous year, without the following incomes:

  • Long- term capital gains (LTCG)
  • Short- term capital gains (STCG)
  • All deductions from Gross Total Income (Section 80C to 80U) except Section 80GG
  • Income received as NRI or from a foreign company taxable under sections 115A, 115AB, 115AC or 115AD

Example of Deduction Under Section 80GG

Sammriddhi is a qualified beautician and owns a beauty salon in a posh locality in the south of Delhi. She has reported a gross total income of ₹12 lakhs for the previous year. Out of her total taxable income ₹50,000 is a long term capital gain and she has invested ₹1 lakh in tax saving options.

She’s staying in a rental home near her salon and pays ₹15,000 per month in rent. She can claim deduction under section 80GG as per the following:

ItemsAmount in ₹
Sammridhi's Gross Total Income12,00,000
- Capital Gains50,000
- Tax Saving Investments1,00,000
Sammridhi's Adjusted Total Income (ATI)10,50,000
The calculation for 80GG Deduction for Rent Paid
Total Rent Paid in the Year1,80,000
A. Max Deduction for Monthly Rent @ ₹5000 p.m.60,000
B. Rent Paid over 10% of ATI75,000
C. 25% of ATI2,62,500
Max Deduction u/s 80GG (Lower of A, B & C)60,000

Since the lowest amount for Sammriddhi in Section 80GG estimate is ₹Rs 60,000, she can claim it as a deduction for the rent paid on the house.

Exceptions in Section 80GG

Let's take a look at some exceptions under section 80GG:

  • You should not be the owner of a property (residential) in the area where you ordinarily live or conduct your work.
  • You will not be entitled to deductions if you are previously claiming the benefit of a self-occupied residential property under the specified provisions (as applicable) while seeking a deduction under Section 80GG.

Information Required for Claiming Deduction under Section 80GG

You will need to provide the following information on the form:

  • Your Name and Postal Address of your residence (rented house)
  • Your PAN
  • Your rental period details
  • Rent paid for the property and mode of payment, i.e., cash, check, bank transfer
  • Name and address of property owner
  • Landlord’s PAN details
  • A declaration that you do not own a residential accommodation at the relevant place in your name or the name of your family members (spouse and minor children) or HUF

You can also fill out this form online while filing your return online.

How to Claim Deduction Under Section 80GG for Property Owners?

If you own a property but are living on rent, you can also claim a deduction under section 80GG when not receiving HRA.

In particular, Section 80GG will not apply if you (or your spouse/minor child, or your HUF, as applicable) own a residential accommodation at the place where you ordinarily reside or perform office duties, or carry on your business or profession.

Also, Section 80GG will not apply if you own a house at another place and its annual value is determined under the specified self-occupied property provisions (as referenced in Section 80GG).

Conclusion

Section 80GG can be a helpful option for taxpayers who pay rent but don’t receive HRA. Before claiming it, ensure you meet the required conditions and retain your rent-related records. If you’re unsure about your eligibility or the calculation, it’s best to cross-check the details while filing your return or consult a tax professional.

Glossary

  1. Section 80GG: Income tax deduction for rent paid when HRA is not received, subject to eligibility and limits
  2. Form 10BA: Declaration form filed to claim Section 80GG deduction, confirming rent payment and conditions met
  3. HRA: House Rent Allowance paid by employer; can be partly tax exempt based on rent, salary, and city
  4. LTCG: Profit from sale of assets held long term; taxed at lower rates with indexation or exemptions where applicable
  5. STCG: Profit from sale of assets held short term; taxed at higher slab or specified rates depending on asset type
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FAQs

Adjusted total income is that part of your Gross Total Income for the financial year which excludes the following incomes:

  • Long- term capital gains (LTCG)
  • Short- term capital gains (STCG)
  • All deductions from Gross Total Income (Section 80C to 80U) except Section 80GG
  • Income received as NRI or from a foreign company taxable under sections 115A, 115AB, 115AC or 115AD

No. It is available only to individuals and Hindu Undivided Families (HUFs) who meet specific eligibility criteria.

No, you cannot claim a deduction under Section 80GG if you receive a home rent allowance as part of your salary. Deduction under section 80GG is available only to those individuals and HUF taxpayers who are either self-employed or not receiving HRA as part of their salary.

Paying rent for residential property allows you to avail of tax deductions either as HRA or under Section 80GG. While deduction for HRA is available based on the allowance received and rent paid, section 80GG is available to you when you do not receive HRA but live on rent. Section 80GG deduction is limited to the minimum of the following three:

  • ₹5000 per month or ₹60,000 for the financial year
  • Rent paid over 10% of Adjusted Total Income
  • 25% of the Adjusted Total Income

HRA (House Rent Allowance) is a partially taxable allowance payable with salary. If you are receiving HRA and living on rent you can claim a part of HRA as a deduction in your ITR. The deduction amount will be limited to the minimum of the following three:

  • 50% of salary (40% in case of non-metro cities)
  • Rent paid over 10% of your salary
  • Amount of HRA received

Yes, you can claim a deduction under section 80GG while staying with your parents. However, you need to meet the following conditions:

  • There is a rent agreement between you and your parents.
  • You are paying rent to your parents, which they show as income in their ITRs for the relevant financial years.

Assessee is the legal term for the taxpayer. When you have earned an income in the previous year you need to file your tax return and deposit the applicable income tax. The ITR will help you assess your taxable income for the previous financial year. The officer who verifies and approves your assessment is called the assessor, and you (the taxpayer) will be the assessee.

No, both the benefits under HRA (section 10(13A)) and Section 80GG are mutually exclusive. This means you can claim either HRA or 80GG in one financial year. This is the key point to remember in the 80gg vs 10 (13a) comparison.

You can calculate the Adjusted Gross Income after deducting amounts under both Sections 80G and 80GG. However, while calculating the Adjusted Total Income for the Section 80GG deduction, you only need to deduct the Section 80G deduction from your gross total income.

The maximum deduction available under Section 80GG rent limit is the least of the following three amounts, capped at a maximum of ₹5,000 per month (₹60,000 annually): 

  • ₹5,000 per month (or ₹60,000 per year)
  • 25% of your total income (adjusted gross total income)
  • Actual rent paid minus 10% of your total income

If you pay rent for your own residence and do not receive HRA (income not covered under Section 10(13A)), you can claim a deduction for rent paid under Section 80GG, subject to prescribed conditions and Form 10BA.

Section 10(13A) relates to HRA exemption for salaried taxpayers receiving HRA, while Section 80GG provides a deduction for rent paid when you do not receive HRA (i.e., no income under Section 10(13A)).

Yes. Many tax-filing platforms offer online tools or calculators to estimate Section 80GG deductions based on rent paid and total income. However, the final claim must still satisfy Section 80GG conditions and Form 10BA requirements.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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