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80 gg deduction

shalini (CA) (525 Points)

29 July 2019

HI,

ASSESS OWNS 2 FLATS IN THE SAME CITY AND PAYING TAXES ON RENTAL INCOME AND HIMSELF STAYING IN THE RENTAL APARTMENT AND PAYING RENT FOR IT. CAN HE CLAIM DEDUCTION U/S 80 GG FOR THE RENT PAID?

THANKS

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3 Replies

CA PREM KUMAR (Chunduru & Co) (296 Points)
Replied 29 July 2019

yes..

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shalini (CA) (525 Points)
Replied 29 July 2019

While claiming a tax deduction, one must remember that the individual himself or his/her spouse, or minor child, or as a member of the Hindu Undivided Family (HUF) must not own any accommodation. Also, if the individual owns any residential property at any place and earns rent from it then no deduction is allowed.

One can avail the simultaneous benefit of deduction available for the home loan against 'interest paid' and 'principal repayment' and HRA in case your own home is rented out.However, the same is not available in case of Section 80GG

I FOUND THIS ARTICLE ONLINE. ACCORDING TO THIS DEDUCTION IS NOT ALLOWED IN MY CASE. PLEASE SUGGEST.

CA PREM KUMAR (Chunduru & Co) (296 Points)
Replied 29 July 2019

this is an extract from act

Deductions in respect of rents paid.

80GG. In computing the total income of an assessee, not being an assessee having any income falling within clause (13A) of section 10, there shall be deducted any expenditure incurred by him in excess of ten per cent of his total income towards payment of rent (by whatever name called) in respect of any furnished or unfurnished accommodation occupied by him for the purposes of his own residence, to the extent to which such excess expenditure does not exceed five thousand rupees per month or twenty-five per cent of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations :

Provided that nothing in this section shall apply to an assessee in any case where any residential accommodation is—

(i) owned by the assessee or by his spouse or minor child or, where such assessee is a member of a Hindu undivided family, by such family at the place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession; or

(ii) owned by the assessee at any other place, being accommodation in the occupation of the assessee, the value of which is to be determined under clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of section 23.

Explanation.—In this section, the expressions "ten per cent of his total income" and "twenty-five per cent of his total income" shall mean ten per cent or twenty-five per cent, as the case may be, of the assessee's total income before allowing deduction for any expenditure under this section.

there is no mention on "at the place where he ordinarily resides". so usually it is considered very liberal while giving chapter vi deductions