Section 80GG
Rent Without HRA

Section 80GG Income Tax Act ka woh provision hai jo TAXPAYERS WITHOUT HRA component in their salary OR SELF-EMPLOYED INDIVIDUALS to claim DEDUCTION FOR HOUSE RENT paid. KEY POINTS: (1) NOT FOR HRA EARNERS: If your salary includes HRA, you use Section 10(13A) for HRA exemption, NOT 80GG. (2) ELIGIBILITY: (a) Self-employed individuals (no employer salary). (b) Salaried with NO HRA in CTC. (c) Salaried with HRA but living in own house (rare). (d) Sometimes pensioners. (3) FORMULA: Deduction is the LOWEST of three: (a) ₹5,000 PER MONTH (₹60,000 annual). (b) Total rent paid MINUS 10% of total income. (c) 25% of total income. (4) MUST NOT OWN HOUSE in city where you work (some exceptions). (5) FORM 10BA mandatory — declaration that you don't own house. (6) OLD REGIME ONLY — new regime me 80GG nahi milta. EXAMPLE: ₹10L income, ₹15K/mo rent. (a) ₹60K (₹5K × 12). (b) ₹80K (₹1.8L rent - ₹1L 10% income). (c) ₹2.5L (25% × ₹10L). LOWEST = ₹60K. Deduction ₹60K. At 20% slab: ₹12,500 tax saving annually.

80GG DEDUCTION = LOWEST of three calculations: (1) ₹5,000 PER MONTH = ₹60,000 annually. Fixed flat amount — same regardless of income. (2) ACTUAL RENT PAID MINUS 10% of total income. (a) Total income = gross income BEFORE 80GG deduction. (b) Actual rent paid annually. (c) If rent < 10% income, deduction = ₹0 from this rule. (3) 25% of TOTAL INCOME. EXAMPLE CALCULATIONS: SCENARIO A: ₹5L income, ₹10K/mo rent: (a) ₹60K. (b) ₹70K (₹1.2L rent - ₹50K 10% income). (c) ₹1.25L (25% × ₹5L). LOWEST = ₹60K. SCENARIO B: ₹10L income, ₹15K/mo rent: (a) ₹60K. (b) ₹80K (₹1.8L - ₹1L). (c) ₹2.5L. LOWEST = ₹60K. SCENARIO C: ₹3L income, ₹5K/mo rent: (a) ₹60K. (b) ₹30K (₹60K - ₹30K). (c) ₹75K. LOWEST = ₹30K. INSIGHT: For most cases, ₹60K cap (₹5K/mo) is binding constraint. Higher-income earners with lower rents may hit cap; lower-income with high rents may be limited by formula 2. STRATEGIC: Pay rent through bank (not cash) for proof. Get rent receipts every month. Maintain records.

FORM 10BA — mandatory DECLARATION for Section 80GG claim. KEY DETAILS: (1) PURPOSE: Self-declaration confirming you/spouse/dependent children don't own residential house at the city/place where you work. (2) WHEN TO SUBMIT: Before filing ITR. Within FY end OR by ITR due date (July 31). (3) FORMAT: Standard form available on Income Tax e-filing portal. Fill online + submit. (4) REQUIRED INFO: (a) Your details (PAN, name). (b) Spouse details + their PAN. (c) Dependent children details. (d) Whether you/family owns house at your work location. (e) Property details if owned outside work location. (f) Rent details (landlord, amount, address). (5) SUBMISSION: ONLINE via Income Tax e-filing portal. SOMETIMES PHYSICAL form accepted. AUTOMATIC PROCESS: When you file ITR with Section 80GG claim, system prompts for Form 10BA submission. Cannot proceed without it. PENALTY FOR FALSE DECLARATION: filing incorrect Form 10BA can lead to scrutiny, deduction rejection + interest + penalty under Income Tax Act. ENSURE TRUTHFUL DECLARATION about house ownership. EXCEPTION: if house owned outside work city (e.g., ancestral home in village while working in Mumbai), eligible for 80GG. Must disclose in Form 10BA.

HRA vs 80GG COMPARISON for tax efficiency: HRA (Section 10(13A)): If salaried with HRA in CTC — uses HRA exemption (much more generous). LOWEST of 3: (a) Actual HRA received. (b) Rent paid MINUS 10% basic salary. (c) 50% basic salary (metro) or 40% basic salary (non-metro). HRA TYPICALLY GIVES ₹2-5L exemption for typical urban renter — much higher than 80GG ₹60K cap. 80GG (Section 80GG): If salaried WITHOUT HRA OR self-employed. LOWEST of 3: (a) ₹60K flat. (b) Rent - 10% income. (c) 25% income. Typically ₹60K — MUCH LESS than HRA. WHO IS BETTER OFF: (a) HRA EARNER: ALWAYS prefer HRA over 80GG (HRA cannot be claimed if no HRA in salary — you can't request employer add HRA artificially). (b) NO HRA + RENT: 80GG only option. (c) SELF-EMPLOYED: 80GG only option. WHEN TO ASK EMPLOYER FOR HRA: If joining new company, negotiate HRA component (typically 40-50% of basic). Will SAVE ₹50K-1L annually vs taking salary structure without HRA. STRATEGIC: For salaried, RESTRUCTURE CTC to include HRA. For self-employed, 80GG is the option. CAP IMPLICATION: 80GG ₹60K cap = ₹15,600 tax saving max at 30% slab. Modest benefit vs HRA's ₹50K+.

NO — Section 80GG AND HRA are MUTUALLY EXCLUSIVE. CANNOT claim both for same FY. RULES: (1) IF YOU GET HRA in salary: use Section 10(13A) HRA exemption only. (2) IF YOU DON'T GET HRA: use Section 80GG. (3) SAME PERSON CANNOT use both even in different jobs in same FY. SCENARIO HANDLING: (a) Job change mid-year: First half HRA earner, second half non-HRA self-employed. Eligible for HRA on first half (if proportionate basis + Form 16) + 80GG on second half (consult CA). (b) Both spouses earning: Each separately uses HRA or 80GG based on own salary structure. (c) Rented in metro + own ancestral home in village: Eligible for 80GG even if own house exists, as long as not in WORK CITY. EXCEPTION CASES: (1) HRA received but on leave without salary for some months — proportionate handling. (2) Some employers offer 'rent allowance' or 'house allowance' instead of HRA — IT department may treat differently. Get CA advice. CRITICAL CHECK: Look at salary slip — see if HRA component exists. If yes — must use HRA exemption (no 80GG). If no — use 80GG. SIMPLE TEST.

Section 80GG OLD TAX REGIME ONLY. New tax regime (default from FY 2023-24): NO 80GG deduction available. CHOICE FRAMEWORK FOR RENTERS WITHOUT HRA: SELF-EMPLOYED RENTER: At ₹5-10L income with ₹60K 80GG + other deductions (80C ₹1.5L, 80D ₹25K): OLD regime ₹5L income, ₹60K + ₹1.5L + ₹25K = ₹2.35L deductions. Taxable ₹2.65L. Tax ~₹6K → 87A rebate covers all. Tax ₹0. NEW regime ₹5L income → 87A covers all. Tax ₹0. Both ZERO tax at this income — chose simpler new regime. ₹10L income with 80GG: OLD regime: ₹10L - ₹50K standard - ₹60K 80GG - ₹1.5L 80C - ₹25K 80D = ₹7.15L taxable. Tax ~₹56K. NEW regime: ₹10L - ₹75K standard = ₹9.25L. Tax ~₹46K. NEW WINS BY ₹10K. THUMB RULE: 80GG cap of ₹60K is small. Doesn't tip choice between regimes by itself. Other deductions (80C, 80D, HRA, 24b) matter more. SWITCH FLEXIBILITY: salaried each year via Form 12BB. Business once via Form 10-IEA. USE CALCULATOR: Richify Income Tax Calculator FY 2026-27 includes 80GG in old regime comparison.

DOCUMENTATION FOR 80GG CLAIM: (1) FORM 10BA SUBMISSION on Income Tax e-filing portal. Mandatory. (2) RENT RECEIPTS / RENT AGREEMENT: at least 11-12 months of rent receipts annually. Each receipt should show: (a) Landlord name + PAN (if landlord PAN unknown, mention 'PAN not available'). (b) Rent amount. (c) Rent month. (d) Address of rented property. (e) Tenant signature acknowledgment. (3) BANK PAYMENT PROOF preferred — UPI/NEFT to landlord (creates clear paper trail). Cash payments allowed but less credible. (4) RENTAL AGREEMENT: lease agreement with landlord, registered (if rent > ₹15K/mo). For shorter-term arrangements, written agreement helps. (5) PAN OF LANDLORD: required if annual rent > ₹1 lakh. Submit Form 12BB to employer or self-claim in ITR. ITR FILING: (1) Old tax regime selection. (2) Schedule VI-A → Section 80GG → enter calculated deduction amount. (3) System auto-applies the lower of 3 formulas. (4) Form 10BA already submitted. RECORDS: maintain for 8 years (assessment window). AUDIT TRAIL: rent receipts + landlord PAN + bank statements + Form 10BA. FRAUDULENT CLAIM RISK: IT Department scrutinizes 80GG claims more than 80C (less common section). Don't fabricate rent receipts — penalties for false documentation.