Section 80GG of Income Tax Act

Section 80GG of Income Tax Act

Section 80GG is the very important Part of the deduction available to Individual and HUF form their gross Income. Section 80GG provides the deduction for the rents paid by the taxpayer in the previous year. Following is the bare act of Section 80GG:

Deductions in respect of rents paid

 In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed ⁴⁵[five] thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations :

Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is—

 (i)  owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

(ii)  owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23.

Explanation.—In this section, the expressions “ten percent of his total income” and “twenty-five percent of his total income” shall mean ten percent or twenty-five percent, as the case may be, of the assessee’s total income before allowing the deduction for any expenditure under this section.