How to Claim Section 80GG Deduction for Rent Paid Without HRA
- PRITI SIRDESHMUKH
- Nov 7
- 9 min read
Section 80GG of the Income Tax Act, 1961 allows taxpayers who do not receive House Rent Allowance (HRA) to claim a deduction for rent paid. This provision ensures that even those living in rented accommodations without HRA can avail tax relief, provided they meet the eligibility conditions. To claim the deduction, individuals must not own a residential property at their place of work, must pay rent for accommodation, and must file Form 10BA declaring rent details. Proper compliance, documentation, and awareness of the deduction limit are essential for smooth claim processing under Section 80GG.
Table of Contents
Understanding Section 80GG of the Income Tax Act
Section 80GG provides a tax deduction to individuals who pay rent but do not receive House Rent Allowance (HRA) from their employer. This provision ensures that even taxpayers without an HRA component in their salary can still claim relief for the rent they pay. It applies to both salaried and self-employed individuals, provided they satisfy the prescribed eligibility conditions. The deduction is designed to support taxpayers who live in rented accommodations due to employment or business requirements in cities where they do not own a residential property.
Eligibility Conditions for Claiming Section 80GG Deduction
To claim the deduction under Section 80GG, certain criteria must be fulfilled:
The taxpayer must be either salaried or self-employed and not receive HRA as part of their income.
The taxpayer, their spouse, or minor child should not own any residential property at the place of employment or business.
If the taxpayer owns property elsewhere, it should not be self-occupied but must be let out.
The taxpayer must be paying rent for accommodation occupied for their residence.
Form 10BA must be filed, declaring that the taxpayer meets the above conditions and is paying rent from their own income.
These conditions ensure that only genuine cases of rent payments without HRA are eligible for this deduction.
Calculation of Deduction under Section 80GG
The deduction under Section 80GG is calculated as the least of the following three amounts:
Rent paid minus 10% of total income
Rs. 5,000 per month (or Rs. 60,000 per year)
25% of total income
For example, if an individual has an annual income of ₹8,00,000 and pays ₹12,000 per month as rent, the deduction will be computed as follows:
Rent paid minus 10% of income = ₹1,44,000 – ₹80,000 = ₹64,000
Rs. 5,000 per month = ₹60,000
25% of total income = ₹2,00,000 The minimum of these three values (₹60,000) will be allowed as a deduction under Section 80GG.
Documents Required to Claim Section 80GG Deduction
To claim this deduction successfully, the following documents are required:
Rent receipts from the landlord containing details such as amount, month, and address.
A rental agreement (recommended though not mandatory).
Proof of rent payment through bank statements or UPI transactions.
PAN of the landlord if annual rent exceeds ₹1,00,000.
Form 10BA, a declaration confirming that HRA is not received and the taxpayer meets all conditions.
Maintaining proper documentation is essential since the Income Tax Department can request verification during assessment.
How to File Form 10BA for Section 80GG
Form 10BA must be filed before claiming a deduction under Section 80GG. It can be submitted electronically through the Income Tax e-filing portal:
Log in to the Income Tax e-filing portal.
Navigate to “e-File” > “Income Tax Forms” > “File Income Tax Forms.”
Search for Form 10BA and select the relevant assessment year.
Enter details such as the address of rented premises, rent paid, landlord’s name, and PAN (if applicable).
Submit and verify the form using Aadhaar OTP or Digital Signature Certificate (DSC).
Once successfully submitted, details from Form 10BA will automatically reflect in your ITR, ensuring the deduction claim is validated.
Is Section 80GG Deduction Allowed in the New Tax Regime?
Under the new tax regime introduced by Section 115BAC, most deductions under Chapter VI-A—including Section 80GG—are not available. Taxpayers opting for the new regime cannot claim this deduction. The government designed the new regime with lower tax rates but without exemptions or deductions to simplify compliance. Hence, those who wish to claim rent deduction under Section 80GG must continue under the old tax regime.
How Section 80GG Works in the Old Tax Regime
In the old tax regime, Section 80GG continues to provide significant relief to individuals without HRA. It can be claimed in addition to other deductions such as those under Sections 80C, 80D, and 80TTA. By properly declaring rent payments and filing Form 10BA, taxpayers can reduce their taxable income effectively. This makes the old regime beneficial for those with multiple deductions and exemptions, especially when the total eligible deductions exceed the difference in tax liability between the two regimes.
Recent Updates on Section 80GG Deduction (Budget 2025)
Budget 2025 retained the core structure of Section 80GG while emphasizing better compliance. The Central Board of Direct Taxes (CBDT) reinforced the requirement for accurate filing of Form 10BA and verification of ownership conditions. The standard deduction and revised slab limits in the new regime were updated, but no specific changes were made to Section 80GG. Taxpayers under the old regime can continue claiming this deduction if they meet the conditions and maintain proper records.
Common Mistakes While Claiming Rent Deduction Without HRA
Some frequent mistakes made by taxpayers include:
Forgetting to submit Form 10BA before filing the ITR.
Claiming deduction while also receiving HRA, which disqualifies eligibility.
Paying rent in cash without receipts or valid proof.
Failing to provide landlord PAN when rent exceeds ₹1,00,000 annually.
Miscalculating total income before deduction computation.
Avoiding these errors helps ensure smooth processing of claims and reduces the risk of notices from the Income Tax Department.
Claiming 80GG Deduction Seamlessly with TaxBuddy
Filing deductions and forms like 10BA can be confusing for many taxpayers. TaxBuddy’s AI-driven platform simplifies this process by auto-verifying eligibility, filling declaration forms accurately, and ensuring no step is missed during return filing. The mobile app guides users through rent deduction claims and provides expert-assisted support for error-free filing. This ensures faster processing and maximum eligible deduction under Section 80GG.
Conclusion
Section 80GG serves as a valuable relief for those who live in rented accommodations without HRA. To benefit from this provision, taxpayers must ensure that ownership conditions are met, rent payments are properly documented, and Form 10BA is filed before submitting their ITR. Using intelligent platforms such as TaxBuddy simplifies compliance and reduces the chances of errors during filing. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers flexibility by providing both self-filing and expert-assisted plans for income tax return filing. The self-filing plan is ideal for individuals with simple income structures, allowing them to file on their own using TaxBuddy’s AI-driven interface. It automatically imports data, performs error checks, and guides users through every step. The expert-assisted plan, on the other hand, is designed for individuals with complex income situations such as capital gains, business income, or multiple deductions. In this plan, a qualified tax expert reviews the return, ensures compliance, and files it on the user’s behalf, guaranteeing accuracy and peace of mind.
Q2. Which is the best site to file ITR?
The Income Tax Department’s official website, incometax.gov.in, is the government-authorized platform for e-filing returns. However, taxpayers often prefer using trusted intermediaries like TaxBuddy due to their ease of use and advanced features. TaxBuddy enhances the filing process through automated data validation, AI-based error detection, and professional guidance. It helps taxpayers avoid common mistakes such as incorrect income entry or missing deductions and ensures that all relevant forms and declarations, such as Form 10BA under Section 80GG, are filed correctly.
Q3. Where to file an income tax return?
Taxpayers can file their income tax returns directly on the official government portal or through approved e-filing intermediaries like TaxBuddy. While the government portal provides a basic interface for submission, platforms like TaxBuddy simplify the process with guided prompts, auto-filled fields, and real-time validation. They also provide integrated features for declaring deductions, uploading investment proofs, and managing documents. Whether salaried, self-employed, or a business owner, TaxBuddy ensures a smooth and error-free filing experience with support for all ITR forms.
Q4. Can I claim Section 80GG if I own a property in another city?
Yes, owning a residential property in another city does not automatically disqualify a taxpayer from claiming Section 80GG. The key condition is that the property should not be self-occupied by the taxpayer, spouse, or minor child. If the property is let out or located in a different city where the taxpayer does not currently reside, the deduction remains valid. For example, a person working in Bengaluru but owning a rented-out house in Pune can still claim the deduction for rent paid in Bengaluru under Section 80GG, provided all other conditions, including Form 10BA filing, are met.
Q5. Is a rental agreement mandatory to claim the deduction?
A rental agreement is not legally mandatory under Section 80GG, but it is highly recommended. The agreement serves as supporting evidence of a genuine rental arrangement between the tenant and landlord. Along with rent receipts and proof of payment, it helps substantiate the claim in case of scrutiny or assessment. If the annual rent exceeds ₹1,00,000, the landlord’s PAN must also be mentioned. In the absence of a rental agreement, taxpayers should ensure that rent is paid through traceable modes such as bank transfer or UPI, and receipts are properly maintained.
Q6. Can a self-employed individual claim Section 80GG deduction?
Yes, self-employed individuals are fully eligible to claim the deduction under Section 80GG. The same rules apply to them as to salaried taxpayers. They must not own any residential property in the city where they conduct business or work and must pay rent for their accommodation. They are also required to submit Form 10BA as a declaration of compliance. The deduction amount is calculated based on their total annual income before claiming deductions under Chapter VI-A. For self-employed professionals and freelancers, this deduction offers valuable tax relief if they operate from rented premises.
Q7. What is Form 10BA and why is it required?
Form 10BA is a declaration form that confirms a taxpayer’s eligibility for claiming deduction under Section 80GG. It serves as an official statement that the taxpayer does not receive HRA and is paying rent for accommodation out of personal income. The form requires key details such as the address of rented property, amount of rent paid, landlord’s name, and PAN (if applicable). This form must be submitted electronically before filing the income tax return. Without Form 10BA, the deduction claim will not be accepted by the Income Tax Department, as it is a mandatory compliance step.
Q8. How is the deduction under Section 80GG calculated?
The deduction under Section 80GG is calculated as the least of the following three values:
Actual rent paid minus 10% of total income.
₹5,000 per month or ₹60,000 annually.
25% of total income. For instance, if a taxpayer earns ₹10,00,000 annually and pays ₹1,20,000 as rent, the three values would be ₹1,20,000 - ₹1,00,000 = ₹20,000, ₹60,000, and ₹2,50,000 respectively. The lowest of these, ₹20,000, becomes the eligible deduction. Taxpayers should carefully compute and report the lowest value to ensure compliance and avoid rejection during assessment.
Q9. Is Section 80GG applicable in the new tax regime?
No, Section 80GG is not available under the new tax regime introduced by Section 115BAC. The new regime eliminates most exemptions and deductions, including those under Chapter VI-A such as 80C, 80D, and 80GG, in exchange for lower slab rates. Taxpayers who wish to claim the rent deduction under Section 80GG must therefore opt for the old tax regime while filing their income tax returns. Platforms like TaxBuddy provide a regime comparison calculator to help users determine which regime results in lower tax liability.
Q10. Can rent paid to parents qualify for Section 80GG?
Yes, rent paid to parents can qualify for a deduction under Section 80GG, provided certain conditions are met. The payment must be genuine, made through verifiable means such as bank transfer, and the parents must declare this rent as income in their own tax return. The taxpayer must also have a proper rental agreement and rent receipts to support the claim. However, if the taxpayer co-owns the property with parents or pays rent in cash without documentation, the claim may be disallowed during scrutiny.
Q11. What happens if Form 10BA is not filed?
Filing Form 10BA is mandatory for claiming Section 80GG deduction. If the taxpayer fails to submit this form, the Income Tax Department may reject the deduction claim during processing or assessment. The form serves as an official declaration confirming eligibility conditions, and without it, the claim lacks validation. Taxpayers must ensure Form 10BA is submitted electronically before filing their return, and the acknowledgement is retained for records. TaxBuddy’s platform automatically alerts users to complete such forms to prevent compliance lapses.
Q12. How can TaxBuddy help in claiming Section 80GG?
TaxBuddy simplifies the process of claiming Section 80GG through its AI-driven system that automatically identifies eligible deductions and assists in filing Form 10BA accurately. The platform validates conditions such as property ownership, rent payment, and HRA eligibility before computation. It also ensures that all necessary proofs, receipts, and declarations are properly documented. With expert-assisted filing plans, TaxBuddy’s professionals verify every detail to minimize the risk of errors or rejection. This makes TaxBuddy an efficient, secure, and reliable choice for individuals seeking to claim rent deductions without HRA.
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