Section 80GG Rent Deduction: Eligibility, Maximum Limit and Form 10BA
Section 80GG provides a deduction for qualifying rent paid for an individual's own residence when house rent allowance (HRA) exemption is not available. The claim is subject to a prescribed calculation, property-ownership restrictions and tax-regime rules.
What is Section 80GG of the Income-tax Act?
Section 80GG of the Income-tax Act, 1961 is a Chapter VI-A deduction for rent paid by an eligible individual for furnished or unfurnished accommodation occupied as their own residence. It principally assists self-employed persons and salaried persons who do not receive HRA that qualifies for exemption under Section 10(13A).
Unlike the HRA exemption, Section 80GG is a deduction from eligible income and requires satisfying the conditions of the section and the relevant income-tax rules. It is not a flat reimbursement of rent.
Who is eligible for Section 80GG?
- Individual taxpayer: The claimant must be an eligible individual paying rent for their own residence.
- No HRA exemption: The claimant must not have income qualifying for exemption under Section 10(13A) during the relevant period. Salaried persons receiving eligible HRA should examine the HRA exemption instead.
- Actual rent: The taxpayer must have genuinely paid rent for the residential accommodation.
- Property restriction at place of residence or work: The taxpayer, spouse, minor child or the Hindu undivided family of which the taxpayer is a member must not own residential accommodation at the place where the taxpayer ordinarily resides, works or carries on business or profession.
- Property elsewhere: Where the taxpayer owns a home at another place, the additional statutory restriction concerning a self-occupied property and its annual value must also be considered.
- Declaration: The prescribed Form 10BA declaration and supporting records should be maintained or submitted as required.
Ownership and HRA conditions must be checked carefully for the relevant period; merely paying rent does not automatically establish eligibility.
Section 80GG deduction limit and calculation
The allowable deduction is the lowest of the following three figures for the eligible period:
| Test | Amount |
|---|---|
| 1. Excess rent test | Rent actually paid minus 10% of adjusted total income |
| 2. Income percentage test | 25% of adjusted total income |
| 3. Monthly ceiling | Rs. 5,000 per month (up to Rs. 60,000 for 12 eligible months) |
Adjusted total income for this calculation broadly means total income before allowing the Section 80GG deduction, reduced by specified deductions under Chapter VI-A and certain other items prescribed in the law. It is not necessarily the same as gross salary or gross total income.
Example: Rent of Rs. 12,000 per month
Assume an eligible taxpayer pays Rs. 1,44,000 rent annually and has adjusted total income of Rs. 5,00,000.
| Calculation | Amount |
|---|---|
| Annual rent minus 10% of adjusted income | Rs. 1,44,000 - Rs. 50,000 = Rs. 94,000 |
| 25% of adjusted income | Rs. 1,25,000 |
| Rs. 5,000 x 12 months | Rs. 60,000 |
| Eligible deduction (lowest) | Rs. 60,000 |
Illustrative example only. Actual deductions depend on eligible rental months, the statutory definition of adjusted income, tax regime and all other conditions.
Form 10BA and documents for claiming rent deduction
Form 10BA is the prescribed declaration associated with Section 80GG under Rule 11B of the Income-tax Rules, 1962. Follow the applicable filing process for the relevant assessment year.
Useful supporting records
- Rent agreement and rent receipts or bank transfer records.
- Landlord's name and address, and PAN where required by the applicable return or reporting instructions.
- Address of rented accommodation and period of occupation.
- Form 10BA declaration and a working paper showing adjusted total income and the three deduction tests.
- Confirmation that property-ownership restrictions and HRA conditions are satisfied.
Use the official Income Tax e-Filing portal for current filing instructions and prescribed forms.
Section 80GG under the old and new tax regimes
Old tax regime: An eligible individual may claim Section 80GG subject to all statutory conditions and limits.
New tax regime: The deduction is generally not available under Section 115BAC. A taxpayer intending to claim it must assess eligibility to select the old regime and comply with the applicable option and return-filing rules.
Important transition: The Income-tax Act, 2025 applies from 1 April 2026. References to Section 80GG here explain the Income-tax Act, 1961 framework relevant to earlier tax years, including assessment year 2026-27. For tax year 2026-27 onwards, consult the corresponding provisions, rules and forms under the 2025 Act before filing; do not assume legacy section numbering continues unchanged.
Key legal provisions and official sources
Section 80GG - Rent paid for residence
For qualifying individuals without Section 10(13A) HRA exemption, the 1961 Act allows a deduction for rent paid in excess of 10% of adjusted total income, subject to the lower of the 25% income limit and the prescribed monthly ceiling. The proviso excludes specified cases involving ownership of residential accommodation by the taxpayer or specified family members.
Section 10(13A) - House rent allowance
Section 10(13A) governs exemption for qualifying HRA received by employees, subject to prescribed conditions. Section 80GG and the HRA exemption are distinct reliefs and should not be claimed on an overlapping basis.
Rule 11B - Declaration in Form 10BA
Rule 11B prescribes the declaration used in connection with the Section 80GG deduction. Check the current electronic-filing requirements for the relevant year.
For primary legal text and updates, refer to the Income Tax Department, Income Tax e-Filing portal and India Code legislation database.
Frequently asked questions
Who can claim the Section 80GG deduction?
An eligible individual who pays rent for their own residence and does not receive house rent allowance (HRA) qualifying for exemption under section 10(13A), subject to ownership and other conditions.
What is the maximum deduction under Section 80GG?
The lowest of rent paid minus 10% of adjusted total income, 25% of adjusted total income, or Rs. 5,000 per month for the eligible rental period.
Is Form 10BA mandatory?
A declaration in Form 10BA is prescribed for claiming Section 80GG relief under the applicable return-filing procedure.
Can I claim Section 80GG under the new tax regime?
No. Section 80GG is generally not available under the default new tax regime; eligible taxpayers must opt for the old regime where permitted.
Can I claim Section 80GG if I own a house?
Ownership by you, your spouse, minor child or HUF at your normal place of residence or work generally disqualifies the claim. Other ownership restrictions also apply.
This article provides general information, not personalized tax advice. Verify the applicable law, notifications and forms for the year of claim.