People who are employed usually receive an HRA as part of their salary, and taxpayers who live on rent may receive a deduction for the rent paid in the income tax sections. But did you know that people who are not dependent on salary, i.e. who have their own business, or who get paid but do not get HRA but live in rent, such people pay income tax as rent. Can also be cut.
Know what section 80GG of Income Tax Act 1961 says?
Under Section 80G of the Income Tax Act, 1961, the taxpayer may be deducted from the income in respect of payment of rent for his own residence, whether the house is decorated or not. That is, under the Income Tax Act, you can get tax relief on rent payments.
Let us now know how much deduction the taxpayer can avail under section 80GG of Income Tax Act, 1961? Eligible amount of deduction under 80GG – whichever is less can only be deducted from income.
5,000 per month,
25% of total income
10% of gross income less than actual rent paid (‘Ten percent of gross income’ and ’25 percent of gross income’ means gross income to be assessed before deducting any expenses)
Terms and conditions for claiming deduction under this section
– There are also terms and conditions for claiming deductions under this section.
The taxpayer is self-employed or salaried.
– Taxpayers have not received HRA at any time during the year for which they are claiming 80GG.
– He has an office at the place where he currently resides, or has a job, or business or occupation duties and that residence does not belong to him or his spouse or his minor child or HUF of which he is a member.
You will need to file Form 10BA with the details of the rent payment.
– If he owns any residential property at any place for which his income is taxable under any other section, then no deduction is allowed under section 80GG.