Section 80GG — Rent Deduction Without HRA Allowance (Self-Employed & Salaried)

Updated: 3 June 2026 | Income-tax Act, 2025 | Section 80GG | Old Regime Only

Section 80GG allows a deduction for rent paid when you do not receive HRA — applicable to self-employed individuals and salaried employees whose salary has no HRA component. Maximum deduction: ₹60,000 per year (₹5,000/month). Deduction is the lowest of: (a) ₹5,000/month, (b) 25% of total income, or (c) actual rent paid minus 10% of total income. Conditions: no self-owned house at the work location; spouse/minor child must also not own one. Old regime only — not available under new tax regime. File Form 10BA declaration before ITR.

₹60,000

Maximum Section 80GG deduction per year — capped at ₹5,000 per month.
Old regime only. Cannot be claimed simultaneously with HRA exemption under Section 10(13A). Declare in Form 10BA before filing ITR.

Section 80GG Deduction — Calculation Formula

Limit	Calculation	Example (Income ₹8L, Rent ₹1.8L/yr)
(a) Fixed monthly cap	₹5,000 × 12 months	₹60,000
(b) 25% of total income	25% × total income (before 80GG)	25% × ₹8,00,000 = ₹2,00,000
(c) Rent minus 10% income	Annual rent paid – 10% of total income	₹1,80,000 – ₹80,000 = ₹1,00,000
Deduction Allowed	Lowest of (a), (b), (c)	₹60,000

Total income = Gross total income before allowing Section 80GG deduction. If rent is very low (e.g., ₹60,000/yr on ₹8L income): (c) = ₹60,000 – ₹80,000 = negative → deduction = ₹0.

Section 80GG vs HRA Exemption (Section 10(13A)) — Comparison

Feature	Section 80GG	HRA Exemption — Section 10(13A)
Who can claim	Self-employed + salaried without HRA	Salaried with HRA component in salary
Maximum deduction	₹60,000/year (₹5,000/month)	No hard cap — % of salary (often ₹1–3L+)
Calculation basis	Lowest of 3 limits	Lowest of 3 limits (HRA received, 40/50% salary, rent – 10% salary)
Own house restriction	Cannot own house at work location	Can own house elsewhere; HRA city rent required
Available in new regime	No	No
Declaration required	Form 10BA (before ITR filing)	Rent receipts + landlord PAN if rent > ₹1L/yr
Can both be claimed together	No — mutually exclusive. Choose one or the other.
Better for	Self-employed / no HRA in salary	Salaried with HRA — almost always higher deduction

Section 80GG — Eligibility Checklist

Condition	Required?	Notes
Paying rent for accommodation	Yes	Must actually reside in rented premises
No HRA received from employer	Yes	If any HRA received, 80GG is not applicable
No employer-provided accommodation	Yes	Free company housing disqualifies
You don't own house at work city	Yes	Spouse + minor child also should not own
Opted for old tax regime	Yes	New regime: 80GG not available
Filed Form 10BA declaration	Yes	Must file before submitting ITR
Landlord's PAN (rent > ₹1L/yr)	Recommended	Not mandatory but advisable for documentation

Frequently Asked Questions

Who can claim Section 80GG deduction?

Section 80GG can be claimed by: (1) Self-employed individuals who pay rent but do not receive HRA. (2) Salaried employees whose salary structure does not include HRA as a component. (3) Individuals whose employer does not provide rent-free accommodation. Key restriction: neither the taxpayer, their spouse, nor their minor child should own any residential house in the city where the taxpayer works or carries on business. Section 80GG is available only under the old regime — not claimable under the new tax regime.

What is the Section 80GG deduction calculation formula?

Section 80GG deduction is the lowest of three amounts: (a) ₹5,000 per month = ₹60,000 per year; (b) 25% of total income (before this deduction); (c) Actual rent paid minus 10% of total income. Example: Annual income ₹8 lakh, rent paid ₹1.8L/year. (a) ₹60,000; (b) 25% of ₹8L = ₹2,00,000; (c) ₹1,80,000 – ₹80,000 (10% of ₹8L) = ₹1,00,000. Lowest = ₹60,000. Deduction allowed: ₹60,000. Form 10BA declaration mandatory before filing ITR.

What is the condition about not owning a house for Section 80GG?

The taxpayer (or their spouse, minor child, or HUF of which the taxpayer is a member) must not own any residential house at the place of employment or business. If they own a house but it is in a different city from where they work, 80GG can still be claimed — but only if that other house is not treated as self-occupied (it must be shown as let out or deemed let out, with rental income declared). The no-ownership condition must be declared annually in Form 10BA, which must be filed before submitting the ITR.

Can a self-employed person claim Section 80GG?

Yes, self-employed individuals (freelancers, consultants, professionals, proprietors) can claim Section 80GG. Since they do not receive any salary-based HRA, they are eligible if they pay rent and do not own a house at the place of work. The deduction is calculated the same way: lowest of ₹60,000/year, 25% of total income, or (rent paid – 10% of total income). Total income here means income before allowing this 80GG deduction. File Form 10BA declaration to claim. Business income is included in total income for computation.

Which gives a bigger deduction — HRA exemption (Section 10(13A)) or Section 80GG?

HRA exemption (Section 10(13A)) is generally higher for salaried persons because: the exemption is the minimum of (actual HRA received, rent paid minus 10% of salary, 40%/50% of salary for non-metro/metro). This often yields ₹1–3 lakh or more. Section 80GG is capped at ₹60,000/year (₹5,000/month). So salaried persons with HRA should always claim 10(13A). Section 80GG is a fallback only when no HRA is received. You cannot claim both simultaneously — it's one or the other.

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