Deduction u/s 80GG

In computing total income, an assessee is allowed a deduction in respect of expenditure towards payment of rent for any furnished or unfurnished accommodation occupied by him for the purpose of his own residence provided the following conditions are satisfied:

1. He should be a self employed person and/ or a salaried employee who is not in receipt of house rent allowance at any time during the previous year.

2. He or his spouse or minor child (including step child and adopted child) or the Hindu Undivided Family of which he is a member, should not own any residential accommodation in India or abroad. Deduction under section 80GG is denied only where the taxpayer, his spouse or minor child or the Hindu Undivided family of which he is a member, own any residential accomodation at the place where the taxpayer resides, the tax payer owns any residential accommodation at any other place and the concession in respect of self occupied house property under section 23(2)(a) or 23(4)(a) is claimed by him in respect of such accommodation, no deduction is allowed in respect of the rent paid under section 80GG, even if he does not own any residential accommodation at the place where he ordinarily resides, performs the duties of his office or employment or carriers on his business or profession.

3. The assessee should file a declaration in Form no. 10BA regarding the expenditure incurred by him towards payment of rent.

Amount of deduction - The amount deductible under this section is the lease of the following amounts

A. Rs. 2000 per month

B. 25 percent of total aincome (total income is calculated after excluding long term capital gain, short term capital gain under section 111A, and Income referred to in section 115A or 115D and amount deductible under sections 80C to 80U but before making any deduction under this section; or

C. the excess of actual rent paid over 10 percent of total income (total income is calculated after excluding long term capital gain, short term capital gain, under section 111A and income referred to in section 115A or 115D and amount deductible under sections 80C and 80U but before making any deduction under this section.)