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Deduction u/s 80Ga in case of presumptive ITR

Rahul Rustagi (Student CA Final ) (310 Points)

03 July 2019

Can we claim deduction of rent paid is 80GG if we are filing ITR u/s 44ADA..???

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3 Replies

ch.h.c.sekhar (1) (60 Points)
Replied 03 July 2019

yes....we can claim chapter VI-A deductions even though opt for presumptive income basis.

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 03 July 2019

1. According to sec 80GG, the condition that was contemplated with respect to claiming 80GG deductions are,
i) You are a self-employed or a salaried employee
ii) You are not in receipt of HRA during the year
iii) You or your spouse or your minor child or HUF does not own any residential house property where you currently reside
iv) You should not own any other residential house property where income of such property is calculated under the head IHP
2. Hence, in your case, you will be considered as a self-employed individual running a profession where you have decided to claim benefit u/s 44ADA which is entirely a different section compared to sec 80GG.
3. Provided all the 4 conditions are satisfied, you will be eligible to claim deductions u/s 80GG
4. Lower if the following will be allowed as deductions u/s 80GG.
i) Rs. 5,000 per month
ii) 25% of Total Income
iii) Actual rent paid less 10% of the Income
For a detailed calculation of Total income please refer the relevant rules
Please correct me if the above solution has an alternative view.

Rahul Rustagi (Student CA Final ) (310 Points)
Replied 04 July 2019

If a freelancer is doing business from home & paying rent for her house & suppose her books of accounts were to be maintained, we would have claimed rent paid as an expense in the P&L.

Now, as per section 44ADA, expenses shall be deemed to have been allowed. In my opinion, the rent paid shall also be deemed to have been allowed. Hence, this would result in double deduction of rent.

And I think a self employed person can claim deduction u/s 80GG in respect of the place where he is residing and not for a place from where he is continuing business.

Plz comment on this.