In India, we have a considerable population that neither owns a house nor gets the benefit of house rent allowance from their employer. In such a case, paying house rent takes a toll on their monthly expenditure. Especially nowadays when the cost of living including rental in bigger cities has skyrocketed, the home rent takes a pinch on the pocket. With transformation from joint to growing number of nuclear families in India, a larger chunk of monthly income is being spent on the house rentals. Each couple now occupies their own house separately after marriage which is mostly a rented one in urban areas.
Considering all these difficulties for a common man, while drafting the tax policies, the government has ensured provisions are offered under the section 80 GG. Under this section, some tax relief is offered towards the house rent paid on monthly basis.
Section 80 GG provides options for deduction for the house rent paid, provided a duly filled declaration (form 10 BA) is provided and no other claims havebeen availed towards the deduction of payment of house rent. In other words, if a salaried employee is being given house rent allowance by his employer and he is claiming a deduction for the same, he won’t be eligible to claim deduction under 80 GG for the payment of rent. All other taxpayers who are neither getting the benefit of HRA nor claimed the expense for rent paid under any other section of the Income Tax Act can very well claim deduction under section 80GG. As per the latest union budget, the erstwhile limit of Rs 24,000 per annum has been increased to Rs 60,000 per annum.