Section 80GG lets you deduct rent paid when you receive no HRA — for self-employed people and salaried employees whose salary has no HRA component. The deduction is the least of three: (a) Rs 5,000 a month = Rs 60,000 a year, (b) 25% of total income, or (c) rent paid minus 10% of total income. It is available only under the old tax regime, and you must file Form 10BA before submitting your ITR. Neither you, your spouse nor your minor child may own a house where you live or work.
Section 80GG is a separate deduction from the HRA exemption under Section 10(13A). If your salary already includes HRA, you claim 10(13A) instead — you cannot use 80GG. 80GG is the fallback for those who get no HRA at all: freelancers, consultants, proprietors, and salaried staff without an HRA head.
Section 80GG Formula — Least of Three
Work out all three limits and claim the smallest. "Total income" here means your gross total income before the 80GG deduction (but after other Chapter VI-A deductions). The example uses an annual income of Rs 8 lakh with rent of Rs 1.8 lakh a year.
| Limit | How it is worked out | Example (Income Rs 8L, Rent Rs 1.8L/yr) |
|---|---|---|
| (a) Fixed monthly cap | Rs 5,000 × 12 months | Rs 60,000 |
| (b) 25% of total income | 25% × total income | 25% × Rs 8,00,000 = Rs 2,00,000 |
| (c) Rent minus 10% of income | Annual rent paid − 10% of total income | Rs 1,80,000 − Rs 80,000 = Rs 1,00,000 |
| Deduction allowed | Least of (a), (b), (c) | Rs 60,000 |
If rent is low, limit (c) can fall below (a). E.g. rent Rs 60,000/yr on Rs 8L income: (c) = 60,000 − 80,000 = negative, so the deduction is nil.
Self-employed · income Rs 8L
Salaried (no HRA) · income Rs 6L
Section 80GG Eligibility & Conditions
80GG is open to individuals only (not companies or firms). You qualify if you pay rent for your own accommodation and meet every condition below.
- You actually pay rent for the home you live in
- You receive no HRA at any point in the year
- Your employer gives you no rent-free accommodation
- You, your spouse or minor child own no house where you live or work
- You (as HUF member) own no self-occupied house at that place
- You opt for the old tax regime
- You file Form 10BA before your ITR
If you own a house in a different city from where you work, you can still claim 80GG — but only if that house is not treated as self-occupied (it must be let out or deemed let out, with the rental income declared). Owning a self-occupied house at your place of work or residence disqualifies you entirely.
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Talk to a tax expert →Section 80GG vs HRA Exemption (10(13A))
If your salary has an HRA component, use the HRA exemption under Section 10(13A) — it is usually far larger and uncapped. Section 80GG is only for those with no HRA. You cannot claim both.
| Feature | Section 80GG | HRA Exemption — 10(13A) |
|---|---|---|
| Who can claim | Self-employed & salaried without HRA | Salaried with an HRA component |
| Maximum benefit | Rs 60,000/yr | No cap (% of salary) |
| Basis | Least of 3 limits | Least of 3 limits (HRA, 40/50% salary, rent − 10% salary) |
| Own-house rule | No self-occupied house at work/home city | May own a house elsewhere |
| Available in new regime | No | No |
| Declaration | Form 10BA before ITR | Rent receipts + landlord PAN if rent > Rs 1L/yr |
Both are old-regime only. You claim one or the other, never both at the same time.
Neither 80GG nor the HRA exemption is available under the new tax regime, which is now the default. If rent relief is your main deduction, run both regimes: the new regime's lower slabs, Rs 75,000 standard deduction and 87A rebate up to Rs 12 lakh taxable income can still beat the old regime plus 80GG. Compare first.
Which regime saves you more with rent relief?
Compare old vs new →How to Claim Section 80GG in Your ITR
Form 10BA is a mandatory online declaration confirming you paid rent and satisfy the no-house-ownership condition. File it on the e-filing portal before you submit your return, otherwise the deduction can be disallowed.
- Rent receipts for the full year
- Rent / lease agreement
- Bank statements showing rent paid
- Landlord PAN (if rent > Rs 1 lakh/yr)
- Form 10BA filed online
- Old regime selected before filing
From AY 2026-27 the Income-tax Act, 2025 has re-codified the old Section 80GG of the 1961 Act into the new Act. The Rs 5,000/month cap and the least-of-three formula are unchanged — "80GG" remains the everyday name. Confirm the exact section reference for your assessment year on the income-tax portal.
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Get ITR Filing Help →Section 80GG — Frequently Asked Questions
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