Who can claim deduction under Section 80GG?

Section 80GG is available to: (1) Self-employed individuals (freelancers, consultants, business owners) who pay rent and do not receive HRA. (2) Salaried employees who do not receive HRA from their employer at all (not just a token HRA, but literally no HRA component). The employee or their spouse, minor child, or the HUF of which they are a member must not own a residential house in the city where they are employed or doing business. Even owning a house in another city disqualifies you from claiming 80GG.

What is the maximum deduction under Section 80GG?

The maximum deduction under Section 80GG is the minimum of three amounts: (1) ₹5,000 per month (₹60,000 per year), (2) 25% of total income (before this deduction), (3) Actual rent paid minus 10% of total income. For example, if your total income is ₹8 lakh and you pay ₹15,000/month rent: Option 1 = ₹5,000/month. Option 2 = 25% of ₹8 lakh/12 = ₹16,667/month. Option 3 = ₹15,000 − (10% × ₹8 lakh/12) = ₹15,000 − ₹6,667 = ₹8,333/month. Deduction = minimum = ₹5,000/month = ₹60,000/year.

What is Form 10BA and is it mandatory for Section 80GG?

Form 10BA is a declaration form required to claim the deduction under Section 80GG. It is a simple self-declaration form where you state that you have paid rent for a particular accommodation and that you do not own a residential property in the city of employment. Form 10BA must be filed on the Income Tax portal before or at the time of filing your ITR. It is mandatory - failing to file Form 10BA will result in the deduction being disallowed. It can be filed online at incometax.gov.in.

Does Section 80GG work under the new tax regime?

No. Section 80GG is a deduction under Chapter VIA of the Income Tax Act and is not available under the new tax regime (Section 115BAC). To claim the 80GG rent deduction, you must opt for the old tax regime when filing your ITR. This is similar to HRA and most other deductions under Sections 80C, 80D, etc. Self-employed professionals and salaried individuals without HRA who pay significant rent often find the old regime more beneficial because of this deduction.

Can I claim both HRA exemption and 80GG deduction in the same year?

No. Section 80GG is specifically for individuals who do not receive HRA from their employer. If you receive any HRA (even a nominal amount) from your employer, you are not eligible for Section 80GG. Such employees should instead use the HRA exemption under Section 10(13A). The two provisions are mutually exclusive.

Section 80GG Deduction India 2026 - Rent Deduction for Self-Employed and No-HRA Employees

Written by Nalini Krishnamurthy | Updated: April 2026 | 9 min read

HRA exemption under Section 10(13A) is well known among salaried employees. But what about freelancers, self-employed professionals, business owners, and salaried employees whose employers do not provide HRA? Section 80GG was introduced specifically to give these taxpayers a rent deduction. This guide explains who qualifies, how much can be deducted, and special conditions including the ownership disqualification and Form 10BA requirement.

Who Can Claim Section 80GG?

Section 80GG is available to an individual assessee who:

Pays rent for any furnished or unfurnished accommodation used for self-residence
Does not receive HRA from any employer as part of salary
Does not own a residential property in the city/town where they currently reside and work
Does not own a residential property in their own name, spouse's name, or minor child's name anywhere in India (this is the key restriction)

Who typically uses Section 80GG:

Freelancers, consultants, and self-employed professionals
Small business owners
Salaried employees working for employers who do not structure HRA in the salary (some small companies or startups)
Partners in a partnership firm who draw remuneration

The 80GG Deduction Formula: Minimum of Three

Similar to HRA, Section 80GG also uses a three-condition minimum formula. The deduction is the lowest of:

₹5,000 per month (i.e., annualised maximum of ₹60,000)
25% of total income for the year (before this deduction and before any other Chapter VI-A deductions)
Actual rent paid minus 10% of total income (rent paid for the full year, minus 10% of annual total income)

"Total income" here means income before deducting the 80GG claim itself but after deducting other items like depreciation, business expenses, etc.

Worked Example: Freelancer with ₹8 Lakh Annual Income

Suppose a freelance designer has total annual income of ₹8 lakh after business expenses and pays ₹15,000/month rent (₹1,80,000/year):

Condition	Calculation	Annual Amount
1. Fixed cap	₹5,000 × 12	₹60,000
2. 25% of total income	25% × ₹8,00,000	₹2,00,000
3. Rent minus 10% of income	₹1,80,000 − (10% × ₹8,00,000)	₹1,80,000 − ₹80,000 = ₹1,00,000
Deduction under 80GG (minimum)	Minimum of ₹60K, ₹2L, ₹1L	₹60,000/year

Tax saving at 20% slab rate: ₹60,000 × 20% = ₹12,000 (plus cess). The ₹5,000/month cap is the binding constraint in most scenarios for middle-income taxpayers, limiting the benefit to ₹60,000/year.

Form 10BA: Mandatory Declaration

To claim Section 80GG, you must file Form 10BA on the Income Tax portal (incometax.gov.in). Key points:

Form 10BA is a self-declaration confirming that: you pay rent, you have no HRA, and you or your spouse/minor child do not own residential property anywhere in India.
It must be filed before the ITR is submitted (in the same filing session or as a pre-filing step).
Filing Form 10BA after ITR submission, even if ITR is revised, may lead to claim disallowance.
Keep rent receipts, rent agreement, and bank payment records to support the Form 10BA declaration in case of scrutiny.

Comparison: Section 80GG vs HRA Exemption

Feature	Section 80GG	HRA Exemption (Sec 10(13A))
Who can claim	Self-employed + salaried without HRA	Salaried with HRA component
Maximum benefit	₹60,000/year (₹5K/month cap)	No fixed monetary cap; based on actual HRA/rent/salary
Property ownership	Must not own any residential property	Can own property elsewhere; not the city of work
New tax regime	Not available	Not available
Form required	Form 10BA (mandatory)	Employer declaration / rent receipts

Related Resources

Disclaimer: This guide is for educational purposes. Section 80GG deduction eligibility rules are based on the Income Tax Act as of FY 2025-26. The ₹5,000/month limit was set in 2016 and has not been revised since. Consult a chartered accountant to verify your eligibility and correctly file Form 10BA.

Check Your HRA Exemption

For salaried employees with HRA, find your optimal tax saving using our HRA Calculator. Self-employed individuals can use the income tax calculator to estimate savings under old and new regimes.

Open HRA Calculator →