If you are paying rent but not receiving HRA (House Rent Allowance), then you can still receive a tax deduction on the rent paid under the Income Tax Act’s Section 80GG. I want you to know that you can’t avail of the benefit of section 80GG if the property is of your minor child or wife. You are required to fill 10BA form to claim the benefit under section 80GG. Now that you know what section 80GG rent paid means, let me explain it in detail using an example:
Check out the conditions that need to be met to avail of the deductions under section 80GG The deduction under this section is given to the least of the following:25 percent of the adjusted gross total income.
Rs.60K per year (Rs.5K per month).
Total rent paid minus 10 percent of basic salary.
Let me explain this using an example now:Let’s say you earn Rs. 5,00,000 annually and lives in a rented flat for which you are not receiving any HRA. You are paying an annual rent of Rs. 1,50,000. In this case, the deduction will be the least of the following:
Condition I: 25 percent of the total annual income, i.e. 1.25 lakh.
Condition II: Rent paid i.e. 1,50,0000 - 50,000 (10 percent of annual income) = 1,00,000.
Condition III: Monthly rental limit of Rs.5000 monthly i.e. Rs. 60000 annually.
In this example, you will be eligible for Rs. 60,000 since Condition III has the least amount.
Find out how much HRA can be claimed without proofRead if you can pay rent to my parents and claim HRA Read how you can claim HRA for own house
I hope now you know what is 80GG rent paid.
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What is 80GG rent paid?
Shantanu
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2021-09-17T17:03:15+00:00 2021-09-17T18:10:43+00:00Comment
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