Section 80GG

Full form: HRA Deduction for Non-Salaried

Tax & Deductions

Section 80GG allows a deduction for house rent paid by individuals who do not receive HRA as part of salary -- typically self-employed, freelancers, and those whose employer does not provide HRA. Maximum deduction: Rs 5,000/month (Rs 60,000/year).

In detail

Conditions for 80GG:n1. Not receiving HRA from employern2. Neither you nor spouse nor minor child owns a house in the city where you workn3. Must file Form 10BA declaring the conditionsnnDeduction is LEAST of:na) Actual rent paid - 10% of total incomenb) Rs 5,000/month (Rs 60,000/year)nc) 25% of total incomennSignificantly less beneficial than HRA exemption for salaried employees (which can be Rs 2-5L for metros).

Formula

80GG deduction = Min(Rent paid - 10% of income, Rs 60,000/year, 25% of income)

Real-life example

🇮🇳 India example

Ravi is self-employed, earns Rs 8L/year, pays Rs 15,000/month rent. Calculation:na) Rs 1.8L - 10% of Rs 8L = Rs 1.8L - Rs 80K = Rs 1Lnb) Rs 60,000nc) 25% of Rs 8L = Rs 2Ln80GG deduction = Rs 60,000 (minimum of three). Tax saving at 20%: Rs 12,000.

Frequently asked questions

Can salaried employees claim 80GG if employer doesn't give HRA? ▼

Yes, if salary structure has no HRA component and you pay rent. However, most employers include HRA in salary structure by default. If your CTC restructuring removed HRA, you can claim 80GG subject to the Rs 60,000 annual cap.