Section 80GG of Income Tax Act - Deductions and Exceptions

Section 80GG of the Income Tax Act provides tax deductions for individuals paying house rent but not receiving House Rent Allowance (HRA) from their employer.

Updated On - 05 Sep 2025

This is especially useful to employees who do not receive house rent allowance (HRA) from their employers. Tax exemption under Section 80GG depends on your salary, the city in which you are staying (Tier-I, Tier-II, Tier-III, etc.), the rent amount and the HRA received.

Eligibility Criteria for Section 80GG

For you to be able to avail the house rent-related deductions under Section 80GG, the following conditions have to be met:

You must meet the below listed conditions to be eligible for Section 80GG deductions of the Income Tax Act:

  1. Individual or HUF: You must be an individual or a Hindu Undivided Family (HUF). The deductions under this section cannot be claimed by businesses.
  1. Employment Status: This deduction can be availed by both salaried individuals or self-employed who do not receive House Rent Allowance (HRA).
  2. No HRA: To be eligible for deductions under Section 80G, you should not be receiving any HRA benefits. If you have received HRA benefits during the fiscal year, you will not be eligible for Section 80GG.
  3. Form 10BA: You will have to submit a filled-out Form 10BA to declare that you are not claiming the benefit of Self-Occupied Property on a house in any other location or in the same location as your employment.
  4. PAN Requirement: You need to mandatorily submit the landlord’s PAN card if the rent paid exceeds Rs. 1 lakh per year.

Calculation of Deductions

Under this section, you can claim the least of the below applicable amounts:

  1. Rs.60,000 annually (Rs.5,000 monthly).
  2. The amount that is equal to the total rent paid minus 10% of the total income.
  3. 25% of annual salary.

To understand this, let us consider an example. Ramesh earns Rs.7 lakh annually and does not get HRA. He is paying a rent of Rs. 18,000 per month, i.e., Rs.2.16 lakh.

Let us now apply the above 3 amounts to determine the corresponding amounts.

  1. Under point 1, the exemption amount is Rs.60,000.
  2. According to point 2, the amount would be – Rs.2,16,000 – Rs.70,000 (10% of income) -Rs. 1,46,000.
  3. As per point 3, the amount would be Rs.1.75 lakh. Since the least of these amounts is applicable as tax deduction under Section 80GG

Ramesh will be able to claim only Rs.60,000 as tax deduction.

Exceptions under Section 80GG

  1. You cannot claim a house rent deduction if you own a house in the location where you are employed or operate a business.
  2. You cannot claim a house rent deduction if you are claiming benefits for an owned house in another location as Self-Occupied Property. If you are living in one city and have a house in another city/town it will be considered are rented out.

If you are living with your parents, there is an interesting way to avail yourself of the benefits under Section 80GG. You could enter into a rental agreement with your parents and pay a specific amount - at least Rs. 60,000 - as rent to your parents. However, your parents will have to show that amount as income in their income tax declaration.

With the real estate rates nowadays, it is quite impossible that the least amount would be anything other than the limit of Rs. 60,000 allowed under Section 80GG. And if you are paying rents lower than Rs. 5,000 per month, it is highly likely that you are in a smaller town and your income is proportionately low and hence exempt from payment of income tax altogether.

In addition, most companies nowadays offer House Rent Allowance as part of the salaries, which will automatically exclude you from being able to claim benefits under Section 80GG.

How to fill Form 10BA Correctly

If you are looking to receive benefits under Section 80GG, then you will have to fill the Form 10BA. The correct way to do this is given below:

  1. Your name and PAN details
  1. Full address
  2. Payment mode
  3. State the tenure of residency in months
  4. Rental amount
  5. Property owner’s address
  1. Declaration that neither you nor any member of your family own any other residential property.
  2. Rented property owner’s PAN details.

You can access this form from the human resources department of the firm that you working for as an employee. You can also get the form from your nearest tax office, or simply visit download it online.

Documents Required

The below-mentioned documents must be submitted to claim deductions under Section 80GG:

  1. Form 10BA.
  2. Landlord’s PAN must be submitted if the rent is more than Rs.1 lakh.
  3. The address and name of the landlord.
  4. Payment method, amount, and tenure.
  5. Address, PAN, and name of the assessee. 

How can property owners claim deductions under Section 80GG

Property owners looking to claim deductions under Section 80GG can do by fulfilling two major criteria. They are mentioned below:

  1. The property owner must be paying rent on a home where they are already residing.
  2. The property the owner owns shouldn't be in the same town or region as their place of employment. Section 80GG does not apply to their yearly income taxes if they choose to live in a rental flat despite owning property in the city.

FAQs on Section 80GG

  • Can I claim benefits under Section 80GG if the property is in the name of my Father?

    No, you cannot claim benefits under Section 80GG if the property is in the name of your Father. You will need to submit Form 10BA to claim the benefit. 

  • Can we claim HRA and 80GG both?

    No, you claim either HRA or 80GG but not both. 

  • Can I pay rent to my parents and claim 80GG?

    If you own a home but rent a home in the same city, you cannot claim a deduction under Section 80GG. Additionally, the benefit is not accessible to someone who owns a home in another city and claims a tax benefit for it, such as a deduction for home loan interest under Section 24(b). 

  • What is the total adjusted income under section 80GG?

    Long-term and short-term capital gains are not included in adjusted total income. The only gains exempt from the 10% tax under Section 111A are short-term capital gains. 

  • Can homeowners claim deductions under Section 80GG?

    You cannot claim deduction under Section 80GG if you own a property of your own. 

  • Can self-employed individuals claim deduction under Section 80GG?

    Yes, self-employed individuals can claim deductions under Section 80GG. 

  • I have a property, but I stay in a rented house in a different city. Can I claim deductions under Section 80GG?

    Yes, you can claim deductions under Section 80GG on the rent you are paying for the rented house. 

  • What is Form 10BA?

      It is a declaration that must be filed by a person who wishes to claim a deduction under section 80GG for paying rent on rental property.

  • How do I obtain Form 10BA?

    Form 10BA can be obtained from the organisation's HR department or tax offices. It can also be downloaded from the income tax website.

Disclaimer
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.