What is Section 80GG and who can claim it?

Section 80GG of the Income Tax Act allows a deduction for rent paid by individuals who do NOT receive House Rent Allowance (HRA) from their employer. It is available to salaried employees without HRA, self-employed professionals, and freelancers who pay rent for residential accommodation. The deduction is available ONLY under the old tax regime (not under the new regime u/s 115BAC). You must file Form 10BA (declaration of rent paid) to claim this deduction.

What is the maximum deduction under Section 80GG for FY 2025-26?

The maximum Section 80GG deduction is the LEAST of three limits: (a) Rs 5,000 per month (Rs 60,000 per year), (b) 25% of adjusted total income, (c) Rent paid minus 10% of adjusted total income. The Rs 5,000/month cap was set in Budget 2016 and remains unchanged for FY 2025-26. Adjusted total income = Gross Total Income minus LTCG, STCG u/s 111A, and deductions under Sections 80C to 80U (except 80GG itself).

Can I claim both HRA exemption and Section 80GG deduction?

No. You cannot claim both HRA exemption (under Section 10(13A)) and Section 80GG deduction simultaneously. If you receive HRA from your employer at any time during the financial year, you are not eligible for Section 80GG. You must choose one: if your employer provides HRA, use the HRA exemption; if not, claim 80GG. Typically, HRA exemption gives a higher benefit because it has no Rs 60,000 annual cap.

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

Form 10BA is a declaration of rent paid that must be filed to claim Section 80GG deduction. It is mandatory under Rule 11B of the Income Tax Rules. The form declares details of rent paid including landlord name, address, PAN (if rent exceeds Rs 1,00,000/year), and the period of tenancy. Without filing Form 10BA, the 80GG deduction will be disallowed. You must submit it along with your income tax return.

Is Section 80GG available under the new tax regime?

No. Section 80GG deduction is NOT available under the new tax regime (Section 115BAC). The new regime, which is the default from FY 2023-24, does not allow most deductions including 80C, 80D, and 80GG. To claim Section 80GG, you must opt for the old tax regime. If rent is a significant expense, compare both regimes — the old regime with 80GG and other deductions may result in lower tax for some individuals.

80GG Rent Deduction Calculator India — FY 2025-26

Calculate how much rent deduction you can claim under Section 80GG if you don't receive HRA. See all 3 limits, find the binding one, and know your exact tax saving. Compare 80GG vs HRA exemption. Check eligibility with our interactive checklist. Old tax regime only. Updated for FY 2025-26.

Calculate Section 80GG rent deduction (old regime only)

Annual total income

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Gross total income before deductions

Monthly rent paid

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Rent paid for residential accommodation

Do you receive HRA?

80GG is only for those who do NOT receive HRA

Tax regime

80GG is available ONLY under old regime

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How to Use This Calculator

80GG Deduction tab

Enter your annual total income, monthly rent paid, whether you receive HRA, and your tax regime. The calculator instantly shows all three Section 80GG limits, identifies the binding (lowest) limit, and calculates your eligible deduction and tax saving at your applicable slab rate. Remember: 80GG is available only under the old tax regime and only if you do NOT receive HRA.

80GG vs HRA tab

Enter your basic salary, HRA received (hypothetical or actual), rent paid, and city type (metro/non-metro). The calculator computes both the Section 80GG deduction (if you had no HRA) and the HRA exemption (if you received HRA) side by side. See which gives a higher deduction and by how much. Useful for salary restructuring decisions — should you ask your employer to add HRA to your CTC?

Eligibility Check tab

Answer 5 simple yes/no questions: Do you receive HRA? Do you own a house at your employment place? Does your spouse/minor child own a house? Will you file Form 10BA? Are you filing under the old regime? The calculator gives an instant eligible/not eligible verdict with specific reasons for each condition. All 5 must pass.

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The Formula

Section 80GG Deduction = LEAST of:

(a) &rupee;5,000/month cap:
Maximum = &rupee;5,000 × 12 = &rupee;60,000/year

(b) 25% of Adjusted Total Income:
Limit B = Adjusted Total Income × 25%

(c) Rent paid minus 10% of Adjusted Total Income:
Limit C = Annual Rent Paid − (Adjusted Total Income × 10%)

Adjusted Total Income (ATI) =
Gross Total Income − LTCG (Sec 112/112A) − STCG u/s 111A − Deductions 80C to 80U (except 80GG)

Tax Saving:
Tax Saving = Eligible 80GG Deduction × (Slab Rate × 1.04)
(1.04 factor accounts for 4% Health & Education Cess)

Worked Example

Priya — self-employed graphic designer in Pune, paying &rupee;15,000/month rent

Priya (29) is a freelance graphic designer earning &rupee;6,00,000/year. She pays &rupee;15,000/month rent for her apartment in Pune. She does not receive HRA (self-employed). She files under the old tax regime and has filed Form 10BA.

Step 1: Calculate the three limits

Annual total income&rupee;6,00,000

Adjusted total income (ATI)&rupee;6,00,000

Annual rent paid (&rupee;15,000 × 12)&rupee;1,80,000

(a) &rupee;5,000/month cap&rupee;60,000

(b) 25% of ATI (&rupee;6L × 25%)&rupee;1,50,000

Step 2: Eligible deduction

Least of (a), (b), (c)&rupee;60,000 ← (a) is lowest

Binding limit&rupee;5,000/month statutory cap

Step 3: Tax saving

Tax slab (income &rupee;6L)20% (old regime)

Effective rate with 4% cess20.8%

Tax saving&rupee;60,000 × 20.8% = &rupee;12,480

Verdict: Priya can claim &rupee;60,000/year deduction under Section 80GG, saving &rupee;12,480 in tax. The statutory cap of &rupee;5,000/month is the binding limit. Even though limits (b) and (c) allow higher deductions, the cap restricts her benefit to &rupee;60,000.

Section 80GG Limits at a Glance (FY 2025-26)

The three limits that determine your eligible 80GG deduction. Your deduction = lowest of the three.

80GG deduction limits table

Limit	Formula	Example (ATI = &rupee;6L, Rent = &rupee;15K/mo)
(a) Monthly cap	&rupee;5,000/month = &rupee;60,000/year	&rupee;60,000
(b) 25% of ATI	ATI × 25%	&rupee;1,50,000
(c) Rent − 10% ATI	Annual rent − (ATI × 10%)	&rupee;1,20,000

Tax saving by slab rate (on max &rupee;60,000 deduction)

Tax Slab	Effective Rate (with 4% cess)	Tax Saving on &rupee;60,000
5% (income &rupee;2.5L–5L)	5.20%	&rupee;3,120
20% (income &rupee;5L–10L)	20.80%	&rupee;12,480
30% (income above &rupee;10L)	31.20%	&rupee;18,720

Eligibility conditions checklist

No HRA: Must NOT receive House Rent Allowance from employer at any time during the FY.
No house ownership (self): Must NOT own a residential house at the place of employment or business.
No house ownership (spouse/minor child): Spouse or minor child must NOT own a residential house at the place where you ordinarily reside.
Form 10BA: Must file Form 10BA (declaration of rent paid) along with your tax return.
Old tax regime: Must file under old regime. Section 80GG is NOT available under new regime (Section 115BAC).

80GG cap history

Period	Monthly Cap	Annual Cap
Before Budget 2016	&rupee;2,000	&rupee;24,000
Budget 2016 onwards (FY 2016-17 to FY 2025-26)	&rupee;5,000	&rupee;60,000

No change in Budget 2024-25 or Budget 2025-26. The cap remains &rupee;5,000/month for FY 2025-26.

FAQ

Can a self-employed person claim Section 80GG? ▼

Yes. Section 80GG is specifically designed for individuals who do NOT receive HRA, which includes self-employed professionals, freelancers, and business owners. In fact, 80GG is one of the few rent-related tax benefits available to the self-employed. You must pay rent for residential accommodation, file Form 10BA, file under the old tax regime, and not own a residential house at the place of employment/business. The adjusted total income for self-employed is calculated the same way — gross total income minus LTCG, STCG u/s 111A, and applicable 80C–80U deductions.

What happens if my rent is less than 10% of my adjusted total income? ▼

If your annual rent is less than or equal to 10% of your adjusted total income, limit (c) becomes zero or negative. Since the 80GG deduction is the least of all three limits, your deduction will be &rupee;0. For example, if ATI is &rupee;10,00,000 and rent is &rupee;8,000/month (&rupee;96,000/year), then limit (c) = &rupee;96,000 − &rupee;1,00,000 = −&rupee;4,000 (treated as 0). Deduction = least of (&rupee;60,000, &rupee;2,50,000, &rupee;0) = &rupee;0. In such cases, your rent is too low relative to income for 80GG to provide any benefit.

Is 80GG better than HRA exemption? ▼

In most cases, HRA exemption is better because it has no &rupee;60,000/year cap. The HRA exemption = least of (actual HRA received, rent − 10% of basic, 50%/40% of basic). For a typical salaried employee with basic of &rupee;30,000/month and HRA of &rupee;12,000/month paying &rupee;15,000 rent, HRA exemption could be &rupee;1,08,000/year vs 80GG maximum of &rupee;60,000. However, 80GG is the only option if your employer does not provide HRA (common for self-employed, freelancers, and employees of small firms). Use the 80GG vs HRA tab above to compare with your exact numbers.

What is adjusted total income for Section 80GG? ▼

Adjusted total income (ATI) for Section 80GG = Gross Total Income minus: (1) Long-term capital gains under Section 112 and 112A, (2) Short-term capital gains under Section 111A (on equity/mutual funds), (3) All deductions under Sections 80C to 80U except 80GG itself. This means your 80C (EPF, ELSS, PPF), 80D (health insurance), 80E (education loan interest), and other Chapter VI-A deductions are subtracted before calculating the 25% and 10% limits. The ATI is typically lower than your gross total income, which means limits (b) and (c) may be lower than expected.

Do I need to show rent receipts for 80GG? ▼

You must file Form 10BA, which is a declaration of rent paid. Additionally, it is advisable to maintain rent receipts as supporting documentation. If annual rent exceeds &rupee;1,00,000, you must provide the landlord's PAN in Form 10BA. If the landlord does not have a PAN, a declaration from the landlord is required. Keep bank transfer records of rent payments (avoid cash for amounts above &rupee;8,000/month) as the Income Tax Department may ask for proof during assessment. Rent agreement and receipts are not mandatorily submitted with the return, but must be available if requested.

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