Dear Anil
Yes, you can definitively consider Sec. 80GG while computing TDS on salary.
However, note the following points:
- Just because the employee is not getting HRA doesn’t make him eligible to claim deduction u/s 80GG.
- Assure that the employee satisfies the conditions laid out under Sec.80GG.
- As per Sec 192(2D) read with Rule 26C, the employee who intends to claim certain deductions including deduction u/s 80GG, must furnish Form 12BB to the employer. This is to enable the employer to estimate the employee’s income and TDS thereon. So, as per the said rule and form, the employee must submit the evidence of the rent paid (that is, rent receipts issued by the landlord) to the employer. (See also Para 4.6.5 of Circular No. 29/2017 dated 05.12.2017).
- No time limit has been specified for submission of Form 12BB by the employee to the employer. However, the employer can require the employee to furnish the same by March of the relevant financial year.
- Also, as per Circular No. 29/2017 dated 05.12.2017, Para 5.5.10, the employer has to ensure that the conditions laid down u/s 80GG is satisfied to allow deduction and also they should satisfy themselves regarding this by insisting on production of evidence of actual payment of rent.
- As per Sec. 80GG read with Rule 11B, the assessee must file Form No.10BA online in order to be eligible to claim deduction u/s 80GG. However, this form is to be filed on or before the due date of submission of return of income u/s 139(1).
- So, a combined reading of Sec.80GG with the Circular may make it sound as if till the time the employee doesn’t file 10BA (which can otherwise be filed along with the Return of Income), the employer cannot take the deduction of Sec.80GG into consideration while computing TDS on salary.
- As a precaution, the employer can insist the employee to file Form 10BA by March end.
- However as long as the employee submits the Form 12BB along with the supporting evidence, the claim u/s 80GG may be entertained.
- As such, Form 12BB doesn’t require the PAN of landlord while claiming deduction u/s 80GG. As an additional precaution, the employer may collect the PAN of the landlord of the employer in case of claim of deduction u/s 80GG. Actually as per Rule 26C, PAN needs to be collected as an evidence while claiming HRA only, that too, only where the aggregate of rent paid during the FY exceeds Rs.1 Lakhs.
Regards
Ajay
CAclubindia
