Many self-employed professionals, freelancers, and business owners pay rent every month, but cannot claim tax benefits like house rent allowance (HRA) exemption, which is exclusively available to salaried employees
This is because HRA is a salary-linked available only to individuals who receive it as part of their compensation package. However, that does not mean there are no other provisions in income tax law that allow non-salaried individuals to claim rent-related deductions.
Taxpayers who pay rent for residential accommodation but do not receive HRA can claim a deduction under Section 80GG of the Income Tax Act, subject to certain conditions. This benefit is available to self-employed individuals as well as salaried taxpayers who do not receive HRA from their employer.
How to claim tax benefit under Section 80GG?
To claim this deduction, the individual must actually pay rent for a furnished or unfurnished house that is occupied as their own residence. A taxpayer must also fulfil the conditions mentioned below to claim this tax benefit:
- ITR must be filed under the old regime.
- A taxpayer must not have received HRA from an employer at any time during the financial year or claimed an HRA exemption for that period.
- A taxpayer must file Form 10BA within the due date.
Maximum deduction limit under Section 80GG
The deduction under Section 80GG is limited to the lowest of the following:
- ₹5,000 per month ( ₹60,000 per year).
- 25% of total income before allowing deduction under Section 80GG
- Actual rent paid minus 10% of total income before allowing deduction under Section 80GG.
However, to claim this deduction, taxpayers must submit Form 10BA, which serves as a declaration confirming that they meet the prescribed eligibility conditions, according to Cleartax.
When to submit Form 10BA and what details are required?
The form must be filed online and submitted on or before the due date of filing your income tax return. The for most individual taxpayers who do not require a tax audit is July 31, 2026 (for FY 2025-26).
Here are the details that must be mentioned in Form 10BA:
- Name and PAN of assessee
- Full address of assessee
- Tenure and rent amount
- Rent payment mode
- Name and address of the landlord
- PAN of the landlord if rental is above ₹1 lakh. If your landlord doesn’t have a PAN, the individual should file a declaration from the landlord along with their name and address.
- A declaration that no other house property is owned by the assessee himself or in the name of spouse/minor child or by the HUF of which he is a member.
Can you claim tax benefits under both HRA exemption Section 80GG?
No. HRA exemption and deduction under Section 80GG cannot be claimed together. Section 80GG is meant specifically for taxpayers who do not receive HRA benefit. Therefore, individuals should assess their eligibility based on their employment status and salary structure before claiming either benefit.
It is also important to note that both the and the Section 80GG deduction is not available under the new tax regime.