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Guide · Salary & Deductions

Rent Deduction Without HRA — Section 80GG, Old Regime Only

Pay rent but get no HRA? Section 80GG lets self-employed people and salaried employees without an HRA component deduct up to Rs 60,000 a year — how the least-of-three formula works, the conditions, and how to claim it with Form 10BA.

Written by
TaxClue Income-Tax Desk
Updated
18 August 2026
Reading time
5 min
Questions
15 answered
  • Updated August 2026
  • CA Reviewed
  • Old Regime Deduction
Quick Answer

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.

This is not HRA exemption

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.

The calculation

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.

LimitHow it is worked outExample (Income Rs 8L, Rent Rs 1.8L/yr)
(a) Fixed monthly capRs 5,000 × 12 monthsRs 60,000
(b) 25% of total income25% × total income25% × Rs 8,00,000 = Rs 2,00,000
(c) Rent minus 10% of incomeAnnual rent paid − 10% of total incomeRs 1,80,000 − Rs 80,000 = Rs 1,00,000
Deduction allowedLeast 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

Rent paid (Rs 15,000/mo)Rs 1,80,000
(a) Rs 5,000 × 12Rs 60,000
(c) Rent − 10% incomeRs 1,00,000
80GG deductionRs 60,000

Salaried (no HRA) · income Rs 6L

Rent paid (Rs 12,000/mo)Rs 1,44,000
(a) Rs 5,000 × 12Rs 60,000
(c) Rent − 10% incomeRs 84,000
80GG deductionRs 60,000
Who qualifies

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
The no-ownership condition trips people up

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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Which applies to you

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.

FeatureSection 80GGHRA Exemption — 10(13A)
Who can claimSelf-employed & salaried without HRASalaried with an HRA component
Maximum benefitRs 60,000/yrNo cap (% of salary)
BasisLeast of 3 limitsLeast of 3 limits (HRA, 40/50% salary, rent − 10% salary)
Own-house ruleNo self-occupied house at work/home cityMay own a house elsewhere
Available in new regimeNoNo
DeclarationForm 10BA before ITRRent 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.

Old regime only — compare before you opt

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 →
Step by step

How to Claim Section 80GG in Your ITR

  1. 1Pick old regimeOpt out of the default new regime
  2. 2Keep rent proofReceipts, rent agreement, bank transfers
  3. 3Fill Form 10BADeclare rent & no-ownership online
  4. 4Compute least of 3Rs 60k / 25% income / rent − 10%
  5. 5Enter in ITRDeductions (Chapter VI-A) schedule

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
Renumbered under the Income-tax Act, 2025

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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Sources
  1. Section 80GG & Form 10BA: incometax.gov.in
  2. Rule 11B (conditions) & Section 80GG, Income-tax Act 1961
  3. Income-tax Act, 2025 (re-codification w.e.f. AY 2026-27)
  4. Regime rules (80GG not allowed in new regime): Section 115BAC

Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.

People also ask

Section 80GG — Frequently Asked Questions

Short, direct answers to the 15 questions readers ask most on this topic.

Section 80GG of the Income-tax Act allows an individual to deduct rent paid for their own accommodation when they receive no House Rent Allowance (HRA). It is meant for self-employed people and for salaried employees whose salary has no HRA component. The deduction is the least of Rs 5,000 a month (Rs 60,000 a year), 25% of total income, or rent paid minus 10% of total income. It is available only under the old tax regime.

Section 80GG can be claimed by self-employed individuals (freelancers, consultants, professionals, proprietors) who pay rent, and by salaried employees whose salary structure includes no HRA. You must not receive any HRA, must not get rent-free accommodation from an employer, and neither you, your spouse nor your minor child may own a residential house where you live or work. You must also opt for the old regime and file Form 10BA.

The maximum is Rs 60,000 a year, i.e. Rs 5,000 per month. But you may get less: the actual deduction is the least of (a) Rs 5,000/month, (b) 25% of total income, and (c) rent paid minus 10% of total income. Whichever of these three is smallest is your deduction.

It is the least of three amounts: (a) Rs 5,000 per month = Rs 60,000 a year; (b) 25% of total income before the 80GG deduction; and (c) actual annual rent paid minus 10% of total income. Example: income Rs 8 lakh, rent Rs 1.8 lakh/year. (a) Rs 60,000; (b) 25% of Rs 8L = Rs 2,00,000; (c) Rs 1,80,000 minus Rs 80,000 = Rs 1,00,000. The least is Rs 60,000, so that is the deduction.

Total income here is your gross total income after all other deductions but before allowing the 80GG deduction itself, and before long-term capital gains and certain special-rate incomes. It is the figure against which the 25% and the 10% in the formula are applied. For self-employed people it includes business or professional income.

Yes. If your rent is low relative to your income, limit (c) — rent minus 10% of total income — can become zero or negative. For example, rent of Rs 60,000 a year on income of Rs 8 lakh gives (c) = 60,000 minus 80,000 = negative, so no deduction is allowed even though you paid rent.

Yes. Self-employed individuals — freelancers, consultants, professionals and proprietors — are a core group for Section 80GG because they receive no salary-based HRA. If they pay rent, do not own a house at the place of work or residence, and meet the other conditions, they can claim the deduction using the same least-of-three formula. Business or professional income is included in total income for the calculation.

You (or your spouse, minor child, or an HUF of which you are a member) must not own any residential house at the place where you live or carry on your work. If you own a house in a different city, you can still claim 80GG, but only if that house is not treated as self-occupied — it must be shown as let out or deemed let out, with the rental income declared.

No. If you receive HRA at any time during the year, you cannot claim Section 80GG for that year. Salaried employees with an HRA component should instead claim the HRA exemption under Section 10(13A), which is usually larger and has no fixed cap. 80GG is strictly for those who get no HRA.

For salaried people with an HRA component, the HRA exemption under Section 10(13A) is almost always larger, because it can be a big percentage of salary (often Rs 1-3 lakh or more) with no absolute cap. Section 80GG is capped at Rs 60,000 a year. So use 10(13A) if you get HRA; use 80GG only when you receive no HRA. You cannot claim both together.

No. Like the HRA exemption and most Chapter VI-A deductions, Section 80GG is not available under the new tax regime, which is the default from FY 2023-24. To claim 80GG you must opt for the old regime when filing. Compare both regimes first, because the new regime's lower rates and higher standard deduction can sometimes beat the old regime even with 80GG.

Form 10BA is a declaration you file online on the income-tax e-filing portal confirming that you paid rent for the year and that you (and your family) do not own a house at the place of work or residence. It is mandatory: you must file Form 10BA before submitting your ITR, otherwise the 80GG deduction can be disallowed. It captures the landlord's details, the address and the rent paid.

First choose the old tax regime. File Form 10BA online. Compute the deduction as the least of Rs 60,000, 25% of total income, or rent minus 10% of total income, and enter it in the Deductions (Chapter VI-A) schedule of your ITR. Keep rent receipts, the rent agreement and bank proof of payment in case of scrutiny.

Keep rent receipts for the full year, the rent or lease agreement, bank statements showing the rent was actually paid, and the landlord's PAN if annual rent exceeds Rs 1 lakh. You must also file Form 10BA online. You do not attach these to the ITR, but you must be able to produce them if the return is scrutinised.

If the total rent you pay in the year exceeds Rs 1 lakh, you should obtain and report the landlord's PAN. For rent up to Rs 1 lakh a year the PAN is not strictly required, but keeping proper rent receipts and payment proof is always advisable to support the claim.