Income & rent details
Gross income minus LTCG, special-rate income, and other Chapter VI-A deductions (except 80GG)
Total rent paid in the financial year (monthly rent × months)
Months in the FY for which rent was paid (1–12)
City type does not affect the 80GG formula, but is required for Form 10BA
Eligibility check
Even partial HRA disqualifies you from 80GG
Property in a different city does not disqualify you
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Section 80GG eligibility, limits, and filing
Yes, salaried employees can claim 80GG, BUT only if their employer does NOT provide HRA (House Rent Allowance) as part of their salary package. If you receive any HRA — even partially — you cannot claim 80GG.
No. Section 80GG is exclusively available under the Old Tax Regime. If you opt for the New Tax Regime (Section 115BAC), all Chapter VI-A deductions including 80GG are disallowed.
Yes, filing Form 10BA is mandatory. It is a declaration submitted to the Income Tax Department confirming that you pay rent for accommodation and do not own property in the same city. File it before submitting your ITR.
Yes, you can pay rent to your parents provided: (1) there is a genuine rent agreement, (2) rent is paid via bank transfer, (3) the rent income is declared and taxed in your parent's ITR. Cash payments are discouraged. The arrangement must be bona fide.
Adjusted Total Income (ATI) = Gross Total Income minus (a) Long-term capital gains, (b) Short-term capital gains taxed at 15%, (c) Income taxed at special rates under Sections 115A–115D, (d) All other Chapter VI-A deductions EXCEPT Section 80GG itself. For most salaried/professional taxpayers, ATI ≈ gross income minus 80C deductions.
Owning property in a DIFFERENT city does not disqualify you — provided you are not claiming the self-occupied property benefit for that house. Ownership in the same city of work/business is the disqualifier.
Yes. Section 80GG was designed for self-employed individuals — freelancers, consultants, business owners — who do not receive HRA. They can claim 80GG if they satisfy all eligibility conditions.
The maximum permissible deduction is ₹5,000 per month (₹60,000 per year) — but only if this is the lowest of the three formula values. The actual deduction is the MINIMUM of: (1) Rent paid − 10% ATI, (2) 25% of ATI, and (3) ₹5,000 × months.
PAN is mandatory if total rent paid in a year exceeds ₹1,00,000. If annual rent is ≤₹1,00,000, PAN is not required but recommended.
If both spouses are salaried without HRA and they genuinely pay rent separately, in principle both can claim. However, if they live in the same rented house and only one person pays rent, typically only that person can claim.
Use the free Section 80GG Rent Deduction Calculator on Toolisky →
The calculator runs the three-limb formula in the background and tells you the exact deduction you can claim. But the output is only as accurate as the inputs you feed it. Here is how to fill each field correctly.
Step 1 — Enter your Adjusted Total Income (ATI): This is not your gross salary or CTC. Start with your Gross Total Income, then subtract long-term capital gains under Section 112, short-term capital gains under Section 111A, special-rate income under Sections 115A to 115D, and all Chapter VI-A deductions except 80GG itself (so subtract 80C, 80D, 80E, etc., but leave 80GG out). The resulting figure goes into this field. If you enter gross salary here, your deduction will be overstated and the claim will fail in scrutiny.
Step 2 — Enter your annual rent paid: Multiply your monthly rent by the number of months you actually paid rent during FY 2025–26. Include only base rent — exclude maintenance charges, society fees, parking fees, and utility bills. If you paid ₹15,000 per month for 12 months, enter ₹1,80,000. If you moved mid-year and paid for only 8 months, calculate accordingly.
Step 3 — Enter the number of months rent was paid: This field accepts any value from 1 to 12. New employees, job-switchers, or those who moved cities mid-year should enter the actual count, not assume 12. The calculator uses this to validate consistency with your annual rent input.
Step 4 — Select city type (Metro or Non-Metro): This field is collected because Form 10BA requires the city of the rented accommodation. The Section 80GG formula itself does not change based on metro classification — unlike HRA exemption, which uses 50% for metros and 40% for non-metros. So this selection is for record-keeping, not calculation.
Step 5 — Select your tax regime: Choose Old Regime to proceed. If you select New Regime, the calculator will flag you as ineligible because Section 80GG is not available under Section 115BAC. There is no workaround — regime choice is binary for this deduction.
Step 6 — Confirm you do not receive HRA: Select "No" only if zero HRA was received in FY 2025–26. Even one month of HRA disqualifies you for the entire year. If your salary slip shows HRA as a component — even at ₹0 value — check with your payroll team before answering.
Step 7 — Property ownership question: Answer "Yes" only if you, your spouse, or your minor child owns residential property in the same city where you currently rent. Property in another city has no impact at this stage. Joint ownership with parents or siblings also counts.
Step 8 — Rent paid to parents: Answer truthfully. The calculator does not penalise a "Yes" — paying rent to parents is legally valid — but it triggers an on-screen reminder about the additional compliance: written rent agreement, bank-transfer payments, and rent declared in the parent's ITR.
Once all eight fields are filled, the calculator runs the three-limb formula instantly and displays the deduction allowed under Section 80GG along with the breakdown of each limb so you can see which one bound the final figure.
The calculator is precise — but it cannot detect if you have entered the wrong figure. These are the input errors that produce misleading results.
Section 80GG sits inside Chapter VI-A of the Income Tax Act, 1961 — the same chapter that houses popular deductions like 80C, 80D, and 80E. It was inserted to address an obvious gap in the law. Salaried employees who receive HRA get tax relief under Section 10(13A). Self-employed people, consultants, and salaried staff whose pay package excludes HRA were left with no equivalent benefit, even though they too pay rent every month. Section 80GG fixes that by allowing a direct deduction from total income for rent paid towards residential accommodation.
The ceiling was meaningfully expanded through the Finance Act, 2016, which raised the fixed monthly cap from ₹2,000 to ₹5,000 — translating to a maximum annual deduction of ₹60,000. That cap has stayed unchanged into FY 2025–26. One critical point that trips up many taxpayers: the benefit is available only under the old tax regime. If you have moved to the new regime (the default from AY 2024–25), Section 80GG is off the table. For statutory text, forms, and the latest notifications, the Income Tax Department of India portal is the definitive source.
Eligibility is narrower than most people realise. The conditions are cumulative — you must satisfy every one of them, not just most of them.
Receiving HRA for even a single month in the financial year disqualifies you from Section 80GG for that entire year — not just the months you had HRA.
The deduction allowed under Section 80GG is not the rent you paid. It is the least of three amounts, calculated independently and then compared. This three-limb structure is why the calculation goes wrong so often when done manually.
| Condition | Amount |
|---|---|
| Fixed ceiling (introduced by Finance Act 2016) | ₹5,000/month = ₹60,000/year |
| 25% of Adjusted Total Income | 25% × ATI |
| Actual rent paid minus 10% of ATI | Annual rent − (10% × ATI) |
The deduction allowed is the lowest of these three figures. In most middle-income cases, the ₹60,000 ceiling wins, which is why people often refer to Section 80GG as a "₹60,000 deduction" — but that label is misleading when income is lower or rent is modest.
Take a worked example. Assume your Adjusted Total Income is ₹6,00,000 and you pay ₹12,000 per month in rent. Annual rent comes to ₹1,44,000.
The lowest of the three is ₹60,000. That is your deduction under Section 80GG. Notice that even though you paid ₹1,44,000 in actual rent, only ₹60,000 reduces your taxable income — the statutory ceiling binds. If you want to model your own numbers without spreadsheet errors, the Section 80GG Rent Deduction Calculator handles the three-limb logic automatically.
Skip the manual calculation — get your exact 80GG deduction instantly on Toolisky →
Adjusted Total Income (ATI) is not the same as Gross Total Income, and confusing the two is the single most common error in Section 80GG calculations. ATI is computed by taking your Gross Total Income and reducing it by: long-term capital gains taxable under Section 112, short-term capital gains under Section 111A, any income chargeable under Sections 115A to 115D (special-rate incomes), and all deductions claimed under Chapter VI-A except Section 80GG itself. The figure you arrive at is the base for both the 25% limb and the 10% limb. Using gross salary, taxable income, or net taxable income instead of ATI produces a wrong deduction and is the kind of error that gets flagged in salary tax assessments.
People often mix the two, but they serve different taxpayer categories and operate under different mechanisms entirely.
| Feature | Section 80GG | HRA Exemption (Section 10(13A)) |
|---|---|---|
| Who can claim | Salaried without HRA + self-employed | Salaried employees with HRA only |
| Tax regime | Old regime only | Old regime only |
| Maximum annual benefit | ₹60,000 | No fixed cap |
| Separate form required | Form 10BA | No separate form |
| Employer involvement | Not needed | Mandatory |
HRA is generally more generous because it is uncapped and tied to a percentage of basic salary. Section 80GG fills the gap for those structurally excluded from HRA — but the ₹60,000 cap is binding. If you are weighing salary restructuring or considering a switch in regime, a quick run through the Old vs New Tax Regime Calculator often clarifies which path produces lower tax for your specific mix of income and deductions.
Form 10BA is the mandatory self-declaration prescribed under Rule 11B of the Income Tax Rules, 1962. It tells the department that you genuinely pay rent, that you do not receive HRA, and that you do not own property at your place of residence or work. Without this form on record, your 80GG claim is effectively built on sand.
Key compliance points for FY 2025–26:
Warning: If Form 10BA is not filed before ITR submission, the 80GG deduction is almost certain to be disallowed during scrutiny assessment or even during processing under Section 143(1). The department treats it as a compliance prerequisite, not a procedural nicety.
Section 80GG claims attract scrutiny because they involve cash-heavy transactions and family arrangements. Keep these documents organised before you file:
Yes, paying rent to parents and claiming Section 80GG is fully legal — and a common, legitimate tax planning move. But the arrangement must be real, not a paper transaction. Four conditions make it bulletproof. First, there should be a genuine rental agreement between you and your parents documenting the terms. Second, the rent paid should reflect market rates for the locality — token amounts like ₹500 a month for a flat in Bandra invite immediate scrutiny. Third, payments should flow through bank transfer, not cash, leaving an audit trail. Fourth, your parents must declare this rent as income under "Income from House Property" in their own return.
There is a built-in family tax efficiency here. If your parents are senior citizens with no other major income, the rent received falls into their lower or nil tax slab, while you save tax at your marginal rate. The department accepts these arrangements — it only objects when the rent is artificially inflated to maximise your deduction or artificially deflated to suppress parental tax. Stick to market rates and document everything.
Most disallowances are not because of fraud — they are because of basic errors that the department flags automatically. Avoid these:
The end-to-end claim process for FY 2025–26 looks like this:
Calculate your Section 80GG deduction free on Toolisky →
Section 80GG rarely sits alone in tax planning. It usually interacts with regime choice, capital gains treatment, advance tax interest, and standard deduction. The calculators below let you stress-test the full picture before you commit to your ITR.
Yes, salaried employees can claim Section 80GG, but only if HRA does not form part of their salary structure for any month of the financial year. Many startup employees, contract staff, and those on consolidated pay packages fall into this category. The claim is allowed only under the old tax regime, and Form 10BA must be filed before the ITR. If you received HRA even for one month, you become ineligible for the entire year.
No. Section 80GG is not available under the new tax regime introduced by Section 115BAC. The new regime trades off most Chapter VI-A deductions, including 80GG, in exchange for lower slab rates. To claim 80GG for FY 2025–26, you must explicitly opt for the old regime when filing your ITR. Salaried taxpayers also need to communicate this to their employer at the start of the year to avoid excess TDS.
Yes, Form 10BA is mandatory under Rule 11B of the Income Tax Rules, 1962. It is a self-declaration that you pay rent, do not receive HRA, and do not own property at your place of residence or work. The form must be filed electronically on the Income Tax e-filing portal before you submit your ITR. Skipping this step typically results in the 80GG deduction being disallowed during processing or scrutiny.
Yes, paying rent to parents is a legitimate and accepted practice under Section 80GG. The arrangement must be genuine — a written rental agreement, market-rate rent, bank-transfer payments, and the rent must be declared by your parents as income under House Property in their own ITR. If parents are senior citizens in a lower tax slab, the overall family tax outflow can drop significantly. Token rent without parental tax declaration is the most common reason these claims get rejected.
Adjusted Total Income is Gross Total Income reduced by long-term capital gains under Section 112, short-term capital gains under Section 111A, special-rate income under Sections 115A to 115D, and all Chapter VI-A deductions except 80GG itself. This adjusted figure is the base for both the 25% limb and the 10% limb of the three-part formula. Using gross salary or taxable income instead of ATI is the most frequent calculation error in 80GG claims.
Owning a house in a different city does not automatically disqualify you from 80GG — but the treatment of that property matters. If you have declared it as self-occupied or it is deemed to be let-out under Section 23 of the Income Tax Act, the 80GG deduction is denied. If the property is genuinely let out and rental income is being offered to tax under House Property, you may still be eligible, provided no property is owned in your current city of work or residence.
Yes, freelancers, consultants, and self-employed professionals are among the primary intended beneficiaries of Section 80GG. They have no employer to provide HRA, so this deduction acts as the closest equivalent relief for their rent expense. They must file Form 10BA, keep proof of rent payment, opt for the old regime, and ensure no residential property is owned in the city where they carry on their profession. The deduction is claimed in their ITR-3 or ITR-4 under Chapter VI-A.
The maximum deduction under Section 80GG is ₹60,000 per year, equivalent to ₹5,000 per month. This ceiling was raised from ₹2,000 to ₹5,000 per month by the Finance Act, 2016, and remains the cap for FY 2025–26. However, the actual deduction is the lowest of three calculations — the ₹60,000 ceiling, 25% of Adjusted Total Income, and actual rent minus 10% of ATI — so most taxpayers receive less than ₹60,000 unless their rent and income are both significant.
The landlord's PAN becomes mandatory when annual rent paid exceeds ₹1,00,000. This threshold is the same one that applies for HRA exemption claims. If your landlord refuses to share PAN despite the rent crossing the threshold, the department can disallow the deduction. As an alternative, the landlord must provide a written declaration with reasons for not having PAN — but in practice, securing PAN at the time of agreement signing is far cleaner.
Both spouses can claim Section 80GG only if each independently satisfies all eligibility conditions and each pays rent in their own name from their own income. In practice, most rental arrangements have a single primary tenant, so only one spouse claims. If the rent agreement is in joint names and both contribute from separate bank accounts, both can claim proportionate deduction. Double-claiming the same rent payment by both spouses is treated as misreporting and attracts penalty under Section 270A.
Receiving HRA for even one month in the financial year disqualifies you from Section 80GG for the entire year. The provision is binary — either you received HRA in FY 2025–26, or you did not. There is no proportionate or partial claim mechanism. If you switched jobs mid-year and one employer paid HRA while the other did not, you can claim HRA exemption under Section 10(13A) for that part of the year but not 80GG for the remainder.
Log in to the Income Tax e-filing portal with your PAN credentials, navigate to e-File → Income Tax Forms → File Income Tax Forms, and search for Form 10BA. Select the relevant assessment year (AY 2026–27 for FY 2025–26), enter your address, landlord details, rental period, amount paid, and mode of payment. Submit and e-verify using Aadhaar OTP, net banking, or DSC. Keep the acknowledgement safely — it is your proof of compliance if the deduction is questioned later.
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Last Updated: 20 May 2026
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