Deduction in respect of rent paid - Section 80GG - Income Tax - Ready Reckoner - Income Tax

Deduction in respect of rent paid - Section 80GG Section 80GG allows the Individuals to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions: the Individual has not been in receipt of any House Rent Allowance(HRA) from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act ; the individual files the declaration in Form No. 10BA (this declaration can be submitted electronically to the A.O. whenever he wants to examine it). the employee does not own: i. any residential accommodation himself or by his spouse or minor child or where such Individual is a member of a HUF, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or ii. at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be. He will be entitled to a deduction to the least amount of the following :- Rent paid minus 10% of the adjusted total income. 5,000 per month. (Rs. 2000/- per month, up to the assessment year 2016-17); 25 % of the adjusted total income. NOTE:- Income to exclude long-term capital gain, short-term capital gain under section 111A and Any income under section 115A to 115D and deductions 80C to 80U . Also, income is before making a deduction under section 80GG. Assessee must be self-employed or salaried. Can a person who pays rent to avail this deduction - If an individual is living with his father and mother in their house, then he/she can claim the benefit of rent deduction as per the section 80GG. He/she will need to make a rental agreement with parents in order to get the rent deduction. However, the mother and father whoever own the house will have to show the rent as income in their tax returns. If the house is jointly owned by the son/daughter then they cannot claim rent deduction benefit on their taxable income. Individual to whom this section is applicable, may be Resident or Non-Resident. Maximum deduction can avail upto ₹60,000/-