Posted by & filed under Income Tax 2016.

As you have seen on various website and TV that House rent allowance limit has been increased from 24000/- from 60000/- but this limit is not applicable for salaried persons getting HRA. 

The existing provisions of Section 80GG provide for a deduction of any expenditure incurred by an individual in excess of ten per cent of his total income towards payment of rent in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence if he is not granted house rent allowance by his employer, to the extent such excess expenditure does not exceed two thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, subject to other conditions as prescribed therein. 

In order to provide relief to the individual tax payers, it is proposed to amend section 80GG so as to increase the maximum limit of deduction from existing Rs. 2000 per month to Rs. 5000 per month.

Detail of deduction for house rent under  section 80GG .

Deduction under section 80GG for house rent paid:

Deduction u/s 80GG is available if following condition are satisfied
  • Deduction is available to Individual Assessee only.
  • He has not received HRA(house rent allownace ) from his employer if he is a salaried person otherwise he should be self employed.
  • He has paid house rent for his own residence.
  • He or his spouse or his minor child or HUF(of which he has a member) should not have a residential house where he ordinarily resides or performs duties of his office or employment or carries on his business or profession;
  • He should not have a house owned by him, which is under his occupation and value of that is not being taken as nil under section 23(2)(a) or 23(4).
  • A declaration on Form 10BA should be submitted .
so if conditions are satisfied then you can claim deduction u/s 80GG for house rent paid

Amount of deduction:Least of the following is deductible u/s 80GG
  • Rs 5000 per month wef 01.04.2016 (2000 per month up to 31.03.2016).
  • 25 % of total income
  • the excess of actual rent paid over 10 % of total income
Total Income means income excluding long term and short term gain under section 111A and income referred to in section 115A or 115D but before making any deduction under section 80C to 80U.


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