What is Form 10 BA – “Deduction u/s 80GG” – House Rent

By | 06/12/2018

Buying your own house always being a priority for the salaried person, although there are several options available in the market to get the home loan. An option of a home loan is also not easy for the employee, most prefer to rent the house. Deduction under section 80gg is introduced to avail the benefit of taxation for the rent amount paid.

What is Deduction u/s 80GG?

Usually, salary received from your employer consist of HRA.

In some cases, consolidated salary received, which doesn’t mention HRA separately.

Section 80GG plays a role for you for the exemption of HRA amount paid for rent.

There is an option available in ITR form u/s 80GG to avail rent paid.

Also Read: What is Form 15G Form 15H?

80GG rent paid

How deduction u/s 80GG works?

Section 80 GG also comes with some of the boundation, not every individual get the benefit of it.

Following the condition required to fulfill the benefit of 80gg.

  1. Must be an individual employee for the financial period.
  2. You have not received HRA from your employee in any form during the financial year for which you are claiming 80GG.
  3. You or your family member (spouse or your minor child) do not own any residential accommodation at the place where you currently reside.
  4. Deduction under section 80GG is unexpected if you are in the possession of any self-occupied property.

Also Read: Fill Income tax return ITR1 in 5 Minutes: The Complete Guide (Updated)

Amount of tax exemption under section 80 GG

There is a certain limit fixed by the income tax department to benefit the employee:

  1. Annually ₹ 60000 (₹ 5000/month) exemption amount is allowed to avail the benefit. or
  2. 25% of the total income of the employee, after all, adjustments (80C to 80 G).
  3. An amount equal to the total rent paid minus (10% of the total income).

The amount comes out the least from the above three example should be claimed for tax exemption u/s 80 GG.

Understand with the help of an example – Declaration under section 80GG

Let’s take an example:

Mr. Raj received an annual salary of ₹ 400000, he pays an annual rent of  150000. 

After putting this example in the above scenario, the tax deduction allowed to him would be:

  1. ₹ 5000 per month (₹ 60000 annually), this is fixed if you go through it.
  2. 25% of total income (25% of ₹ 400000) i.e. ₹ 100000.
  3. Actual rent paid ₹ 150000 (₹ 150000 – 10% of ₹ 400000 (Total income) i.e. ₹ 40000 = ₹ 110000).

Also read: Income tax rebate u/s “87 A” allowed to individual

The amount comes out the least from the above three example should be claimed for tax exemption u/s 80 GG. From the above example, Mr. Raj can claim ₹ 60000 annually u/s 80GG.

Documents required u/s 80GG

  1. An employee needs to furnish a rent agreement along with rent receipt monthly.
  2. It is mandatory to fill Form 10 BA to claim tax deduction u/s 80GG.

Income tax department provides the option to fill Form 10 BA online through their website.

Income tax forms

After selecting “Income tax forms” you will get the option of form selection, which brings you to the list of the form:

Form 10BA

After selecting the form and inserting assessment years along with submission mode Click continue:

Also Read: Tax relief under section 89(1) on salary arrears

You will get “Form 10 BA” – Declaration to be filled by the assessee claiming deduction under section 80GG.

Fill form 10BA

This form is very clear to understand and after filling the form just click submit to complete the process of claiming tax deduction u/s 80GG.

After submission of this form, you can insert the amount in the portion of Part D “80GG” in your ITR Form.

Form 10ba is mandatory to proves that the employee is not claiming any benefit of the self-occupied property where he is employed.

Also Read: Understand Tax saving options:(80C deduction Guide) Download excel sheet

Author Profile

Amit Bansal
Amit Bansal
Hey, Amit Kumar Bansal, the man behind this blog. I always passionate about Taxes, Stock Market. This was one of the reasons why I have chosen the field of account. Blogging was not the coincidence it was a proper decision. The main aim of this blog is to help readers to take an informed financial decision. If you like my efforts kindly subscribe to this blog and also let your friends know about this website by sharing.

2 thoughts on “What is Form 10 BA – “Deduction u/s 80GG” – House Rent

  1. Amara

    My gross salary is 50000 pm. I receive 2300 pm as HRA. But I pay 5000 pm as rent. Can I avail the deduction for the difference amount 2700 pm ?

    Reply
    1. Amit Bansal Post author

      Hello Amara,

      section 80GG comes into play on those cases in which HRA separately paid in not mentioned, but in your case you are covered u/s 10(13A) of the income tax act.

      Thanks 🙂

      Reply

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