Section 80GG: Claim Rent Deduction Without HRA
Self-employed or not getting HRA? Section 80GG lets you deduct rent paid, up to ₹5,000 a month. The three-way limit, Form 10BA and a worked example.
Section 80GG lets an individual paying rent for their own residence claim a deduction without receiving House Rent Allowance (HRA), subject to eligibility conditions. For FY 2025-26 / AY 2026-27, the deduction is the lowest of ₹5,000 per eligible month, 25% of adjusted total income, or rent paid minus 10% of adjusted total income. It is available only under the old tax regime, and Form 10BA must be furnished.
Who can claim section 80GG?
Salaried individuals without HRA, freelancers, consultants and other self-employed individuals can claim the deduction if they satisfy the rent and property-ownership conditions.
Under Sec. 80GG Income-tax Act, the rent must relate to furnished or unfurnished accommodation occupied for your own residence. Office rent is not covered by this personal deduction.
The key conditions are:
- You must not receive HRA covered by Sec. 10(13A) Income-tax Act during the financial year.
- Neither you, your spouse, your minor child nor the HUF of which you are a member should own residential accommodation at the place where you ordinarily reside, perform employment duties, or carry on your business or profession.
- If you own residential accommodation elsewhere, it must not be treated as self-occupied accommodation under Sec. 23(2)(a) or Sec. 23(2)(b) Income-tax Act.
The last condition matters even when the owned property is in another city. Owning an elsewhere-located property does not automatically disqualify you, but its tax treatment must be checked.
How is the section 80GG deduction calculated?
Your deduction is the lowest of the monthly ceiling, the income-based ceiling and the eligible excess of rent over 10% of adjusted total income.
First calculate adjusted total income (ATI). Broadly, start with gross total income, exclude long-term capital gains, short-term capital gains covered by Sec. 111A Income-tax Act, and relevant special-rate income covered by Sec. 115A to Sec. 115D Income-tax Act, then subtract other eligible Chapter VI-A deductions.
Do not subtract the section 80GG deduction itself when calculating ATI. Special-rate income requires careful treatment, so do not simply use salary, turnover or bank credits as ATI.
| Limit | Calculation |
|---|---|
| A: Monthly ceiling | ₹5,000 × eligible months of rented occupation |
| B: Income-based ceiling | 25% of ATI |
| C: Rent-based ceiling | Eligible rent paid − 10% of ATI |
| Deduction allowed | Lowest of A, B and C, subject to a minimum of zero |
The maximum for 12 eligible months is ₹60,000. However, that is a ceiling, not an automatic deduction. If rent does not exceed 10% of ATI, no deduction arises.
For Bengaluru renters paying substantial rent, the ₹5,000 monthly ceiling often restricts relief, but the other two limits must still be calculated.
What does a worked example look like?
Arjun can deduct ₹60,000 on the figures below, but his actual tax saving depends on which tax regime is better overall.
Assume Arjun is a resident freelance designer in Bengaluru, aged below 60, with ATI of ₹9,00,000. He pays ₹18,000 monthly throughout FY 2025-26, totalling ₹2,16,000. He meets all eligibility conditions and has no special-rate income.
- Limit A: ₹5,000 × 12 = ₹60,000.
- Limit B: 25% × ₹9,00,000 = ₹2,25,000.
- Limit C: ₹2,16,000 − ₹90,000 = ₹1,26,000.
- Deduction: ₹60,000, being the lowest amount.
Assuming ₹9,00,000 is also his taxable income before this deduction, his old-regime taxable income becomes ₹8,40,000.
| Old-regime calculation | Before deduction | After deduction |
|---|---|---|
| Taxable income | ₹9,00,000 | ₹8,40,000 |
| Income tax before cess | ₹92,500 | ₹80,500 |
| Health and Education Cess at 4% | ₹3,700 | ₹3,220 |
| Total tax | ₹96,200 | ₹83,720 |
The deduction saves ₹12,480 within the old regime.
However, for AY 2026-27, a resident individual with qualifying ordinary income up to ₹12,00,000 can receive the new-regime rebate under Sec. 87A Income-tax Act. On these assumptions, Arjun’s new-regime tax would be nil. Claiming 80GG therefore does not make the old regime his better choice.
What is Form 10BA, and when should you file it?
Form 10BA is the prescribed declaration supporting a section 80GG claim and should be furnished electronically before filing the return claiming the deduction.
The declaration is prescribed under Rule 11B Income-tax Rules. It records the rented accommodation, rent paid, landlord details and declarations concerning residential-property ownership.
On the income-tax e-filing portal, locate Form 10BA, select the appropriate assessment year, complete the details and verify the submission.
Keep the acknowledgement with your records. Complete any related return fields required by the applicable ITR utility, but do not assume that every return form necessarily requires an acknowledgement number.
Submitting Form 10BA does not itself claim the deduction. You must also enter the eligible amount in your income-tax return. Without the prescribed declaration, the claim may be disallowed.
How does section 80GG compare with HRA exemption?
HRA exemption applies to eligible salaried employees receiving HRA, whereas section 80GG provides limited relief to eligible individuals who do not receive it.
| Point | HRA exemption | Section 80GG |
|---|---|---|
| Legal provision | Sec. 10(13A) Income-tax Act and Rule 2A Income-tax Rules | Sec. 80GG Income-tax Act |
| Eligible person | Salaried employee receiving HRA | Eligible individual without HRA |
| Calculation | Depends on HRA, qualifying salary, rent and location | Lowest of three statutory limits |
| Maximum | No single ₹60,000 annual ceiling | Up to ₹60,000 for 12 eligible months |
| Documentation | Rent evidence, including employer requirements where applicable | Form 10BA and rent evidence |
| Tax regime | Old regime only | Old regime only |
If you receive HRA, use our HRA exemption calculator instead. You cannot use section 80GG merely because your HRA exemption is small.
Can you claim the deduction for rent paid to parents?
Rent paid to a parent can qualify when the tenancy is genuine and all section 80GG conditions are satisfied.
A parent’s ownership is not, by itself, one of the disqualifying ownership categories. However, joint ownership involving you, your spouse, your minor child or your HUF needs review.
Keep a rent agreement, rent receipts and preferably bank-transfer records. The parent should report the rental income appropriately in their return, where required. Cash payments are not automatically prohibited, but unsupported family arrangements are harder to substantiate.
Retain the landlord’s name, address and PAN where available, together with evidence that you actually occupied the property.
What mistakes should you avoid?
The main errors involve HRA eligibility, property ownership, incorrect ATI and missing documentation.
Avoid:
- Claiming 80GG after receiving HRA for part of the same financial year.
- Treating ₹60,000 as a flat deduction regardless of rent or ATI.
- Using gross income instead of adjusted total income.
- Overlooking residential ownership by a spouse, minor child or relevant HUF.
- Ignoring the self-occupied treatment of an owned house elsewhere.
- Filing without Form 10BA or adequate payment evidence.
- Selecting the old regime without comparing total tax.
The new regime is the default under Sec. 115BAC Income-tax Act. Individuals with business or professional income generally need Form 10-IEA by the applicable due date to opt out, and switching restrictions apply.
How SP & SC helps
SP & SC reviews eligibility, calculates ATI, assists with Form 10BA and compares both regimes before recommending a claim.
Our income tax filing support includes reviewing rental documents, property ownership and applicable regime-selection requirements.
Fees are a fixed quote after reviewing the case, with a written scope before work starts. Contact SP & SC or message us on WhatsApp at +91 90356 74566.
Frequently asked questions
These answers cover common section 80GG questions for FY 2025-26 / AY 2026-27.
What is the maximum deduction under section 80GG?
₹60,000 for 12 eligible months, subject to the other two limits. The monthly ceiling is ₹5,000.
Do I need the landlord’s PAN?
Keep it on record where available, especially when annual rent exceeds ₹1 lakh. The employer-documentation threshold used for HRA should not be confused with a separate 80GG eligibility test.
Can I claim 80GG in the new tax regime?
No. Sec. 115BAC Income-tax Act does not permit this deduction.
I received HRA for three months. Can I claim 80GG for the rest?
No. Receiving HRA during the financial year prevents a section 80GG claim for that year.
Can I claim for only part of the year?
Yes, if otherwise eligible. Use the actual eligible rent and ₹5,000 for each eligible month, while applying the income-based limits using annual ATI.
Written by
SP & SC Editorial
Editorial team at SP & SC Legal and Taxation Services — practising advocates, chartered accountants, and company secretaries publishing hands-on guidance from live client files.
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