New Delhi: If an assessee is self-employed or does not get house rent allowance from his employer, then he can not avail the benefits of the tax deduction on HRA under Section 10-13A. In such a situation, an individual can claim deduction on house rent paid under Section 80GG. As per Section 80GG of the I-T Act, a taxpayer can claim the lowest of the following three as deduction towards house rent payment:
- Rs 5,000 per month
- 25% of the adjusted total income
- Actual rent paid minus 10% of income
However, certain conditions should be met in order to avail the benefits of Section 80GG:
i) The assessee should not be in receipt of any house rent allowance from his employer.
ii) The individual has filed a declaration in Form No 10BA
iii) The assessee or any member of his family (spouse, children) should not own any residential house property at the place where he ordinarily resides or performs office duties or causes his business or profession.
iv) The assessee should not own any residential accommodation in his or her own occupation, at any other place, whose value is to be determined as per Sec 23(2)(a) or Sec 23(4)(a).
If you are wondering whether you can claim this deduction if you own a flat and it is vacant then you need to know that deduction under Section 80GG is allowed only if the rent paid during the years exceeds 10% of the total income after all the deductions. The deduction is available at Rs 5,000 per month subject to a maximum of 25% of the total income. However, this deduction is not available in case you, your partner, any minor child or your HUF owns a house in the same city in which you are living and paying rent for even if that house has been let out.
Also, you cannot claim deduction under Section 80GG if you own a house at any other place and which is used by you for your own occupation. In case you and your partner both own a flat which is left vacant and one of the flat out of the two is kept for occupation, the owner of that flat will not be able to claim this deduction. So, if you and your partner will let out your flats, both will be able to claim the deduction under Section 80 GG.