Everything You Need to Know About Section 80GG: Claiming Rent Deductions Without HRA

Paying rent every month can be a significant expense, especially for salaried employees who do not receive House Rent Allowance (HRA) and for self-employed professionals. The good news is that the Income Tax Act provides a specific deduction for eligible taxpayers who pay rent but cannot claim HRA exemption. This is where Section 80GG becomes important during income tax return filing.

At GST Wale, we often come across taxpayers who assume that rent-related tax benefits are available only when HRA is part of their salary. That is not correct. If you meet the prescribed conditions, Section 80GG can provide a useful rent deduction. If you want professional assistance with your return, you can also explore our ITR Filing service.

For AY 2026-27, the Income Tax Department states that the deduction under Section 80GG is available subject to specific conditions, including the filing of Form 10BA and reporting its acknowledgement number in the relevant schedule of the return.

What Is Section 80GG and How Does It Help With Income Tax Return Filing?

Section 80GG is designed for individuals who pay rent for residential accommodation but do not receive HRA as part of their salary. It can be particularly useful for a non-salaried individual, freelancer, consultant, professional or salaried person whose salary structure does not include HRA.

The deduction is not equal to the entire rent paid. Instead, the eligible amount is calculated using prescribed limits. The taxpayer can claim the lowest of these three amounts:

• Rent paid minus 10% of total income before claiming the deduction.
• ₹5,000 per month.
• 25% of total income before the deduction.

Therefore, the maximum deduction under the current rules for AY 2026-27 is ₹60,000 per year, subject to the other eligibility conditions.

This distinction is important during income tax return filing because simply paying rent does not automatically make the entire rent deductible.

Who Can Claim Section 80GG During Income Tax Return Filing?

Section 80GG is mainly relevant to individuals who satisfy the prescribed conditions. It can benefit both salaried taxpayers without HRA and eligible self-employed individuals.

Generally, you should check the following conditions before claiming the deduction:

You should not receive eligible HRA

If your salary includes HRA and you are claiming an exemption under Section 10(13A), you cannot simultaneously claim Section 80GG for the same purpose. The department specifically restricts Section 80GG where the taxpayer receives eligible HRA.

The accommodation should be used for your own residence

The rent should relate to furnished or unfurnished residential accommodation occupied by you for your own residence. Section 80GG is not intended to provide a general deduction for every rental payment made by a taxpayer.

Property ownership restrictions apply

You, your spouse or minor child should not own a residential accommodation at the place where you ordinarily reside, perform your duties, work or carry on your business or profession.

There are also restrictions relating to ownership of another residential property that is treated in the prescribed manner under the law. This is one of the areas where taxpayers should be particularly careful before making a claim during income tax return filing.

Form 10BA is important

A declaration in Form 10BA is required for claiming the Section 80GG benefit for AY 2026-27. The Income Tax Department also requires the Form 10BA acknowledgement number to be entered in the relevant Schedule 80GG while filing the return.

How Is the Section 80GG Rent Deduction Calculated?

Let us understand the calculation with a practical example.

Suppose Rahul is a consultant and earns ₹7,20,000 as eligible total income before the Section 80GG deduction. He pays monthly rent of ₹15,000, meaning his annual rent is ₹1,80,000.

Now calculate the three limits:

1. Annual rent minus 10% of total income
   ₹1,80,000 − ₹72,000 = ₹1,08,000
2. 25% of total income
   ₹7,20,000 × 25% = ₹1,80,000
3. ₹5,000 per month
   ₹5,000 × 12 = ₹60,000

The lowest amount is ₹60,000. Therefore, Rahul's maximum Section 80GG deduction would be ₹60,000, assuming all other conditions are satisfied.

This example shows why paying a higher rent does not necessarily mean you will receive a proportionately higher tax deduction. The statutory ceiling remains important during income tax return filing.

What Is Form 10BA and Why Is It Required?

Form 10BA is a declaration connected with a Section 80GG claim. It confirms relevant details about the taxpayer's rental accommodation and eligibility.

For AY 2026-27, filing Form 10BA is mandatory for claiming the deduction, and the acknowledgement number needs to be reported in Schedule 80GG of the income tax return.

Before submitting Form 10BA, taxpayers should carefully verify:

• Rent actually paid during the relevant financial year.
• Details of the rented residential accommodation.
• Ownership-related conditions.
• Whether HRA has been received and claimed.
• Income figures used for calculating the deduction.

A common mistake is to focus only on the rent amount and ignore the other eligibility conditions. For a smooth income tax return filing process, the entire claim should be reviewed rather than relying only on rent receipts.

Section 80GG for a Non-Salaried Individual

Section 80GG can be particularly useful for a non-salaried individual because self-employed professionals and business owners generally do not have an employer-provided HRA component.

For example, a freelance graphic designer, independent consultant or professional may pay ₹20,000 monthly rent while working from a rented residence. If the person satisfies the prescribed conditions and follows the required compliance process, Section 80GG may provide a limited accommodation deduction.

However, the deduction is not a business expense simply because the taxpayer works from home. Section 80GG is a separate personal rent deduction and should not be confused with expenses that may be allowable while computing business or professional income.

This distinction matters when planning self-employed tax saving strategies.

Is Section 80GG Available Under the New Tax Regime?

This is one of the most important points to check before income tax return filing.

For AY 2026-27, the Income Tax Department's ITR validation rules clearly provide that Section 80GG cannot be claimed when the new tax regime is selected. The deduction is available when the taxpayer is eligible under the old tax regime.

Therefore, taxpayers should compare their tax liability under the applicable regimes before deciding which regime is beneficial. Claiming Section 80GG alone may not make the old regime more tax-efficient in every case.

There is also an important transition in Indian income-tax law. The Income Tax Department has clarified that the Income-tax Act, 1961 was repealed with effect from 1 April 2026, while provisions of the old Act continue to govern tax years beginning before that date. Accordingly, AY 2026-27 returns relate to the period governed by the old Act.

For later tax years, corresponding provisions under the Income-tax Act, 2025 need to be considered separately.

Common Mistakes to Avoid During Income Tax Return Filing

Taxpayers frequently make avoidable errors while claiming rent deduction. Some common mistakes include:

Claiming the entire rent paid

Section 80GG has a formula and an annual ceiling. Paying ₹2 lakh in rent does not mean ₹2 lakh can automatically be claimed as a deduction.

Ignoring Form 10BA

For AY 2026-27, Form 10BA and its acknowledgement details are an essential part of the compliance process.

Claiming 80GG despite receiving eligible HRA

A taxpayer cannot simply choose whichever rent benefit gives a better result. The conditions under the relevant provisions must be satisfied.

Forgetting the property ownership conditions

Owning a residential property can affect eligibility. This should be checked before making the claim.

Choosing the tax regime without comparison

Since 80GG is not available under the new regime for AY 2026-27, taxpayers should compare their overall deductions, exemptions and tax liability before selecting the regime.

How to Claim Section 80GG: Step-by-Step

For a smoother income tax return filing experience, follow this approach:

1. Confirm that you are eligible for Section 80GG.
2. Check that you are not claiming eligible HRA exemption.
3. Verify the property ownership conditions.
4. Calculate your annual rent actually paid.
5. Calculate 10% and 25% of the applicable total income.
6. Compare the three prescribed limits.
7. Complete and submit Form 10BA.
8. Keep the acknowledgement details available.
9. Report the eligible deduction correctly in your income tax return.
10. Review the selected tax regime before final submission.

Keeping rent agreements, receipts and payment records organised is also a sensible practice. Even where a particular document is not required to be uploaded with the return, maintaining supporting records can help if the claim is questioned later.

FAQs About Section 80GG and Income Tax Return Filing

Can I claim Section 80GG if I am self-employed?

Yes, an eligible self-employed taxpayer can claim Section 80GG if all prescribed conditions are satisfied. It can therefore be relevant for freelancers, consultants and other professionals who pay rent but do not receive HRA.

What is the maximum Section 80GG deduction?

For AY 2026-27, the deduction is restricted to the lowest of rent paid minus 10% of applicable total income, 25% of applicable total income, or ₹5,000 per month. Therefore, the maximum annual amount is ₹60,000, subject to eligibility.

Is Form 10BA mandatory for Section 80GG?

Yes. For AY 2026-27, Form 10BA is mandatory for claiming Section 80GG, and its acknowledgement number must be entered in Schedule 80GG while filing the return.

Can I claim Section 80GG under the new tax regime?

No, Section 80GG cannot be claimed under the new tax regime for AY 2026-27. The deduction is available when the taxpayer is eligible under the old tax regime.

Does paying rent automatically qualify me for the deduction?

No. Paying rent is only one part of the requirement. HRA status, property ownership, residential use, Form 10BA and the prescribed calculation limits must also be considered.

Plan Your Income Tax Return Filing Carefully

Section 80GG can be a valuable rent deduction for eligible taxpayers who do not receive HRA, particularly a non-salaried individual or salaried person whose compensation structure does not provide HRA. However, it is subject to specific conditions, a calculation formula and a maximum limit.

For AY 2026-27, remember the key points: check eligibility, understand the ₹5,000 monthly ceiling, complete Form 10BA, report the acknowledgement correctly and compare the old and new tax regimes before completing your income tax return filing.

At GST Wale, our approach is simple: understand your income, identify legitimate deductions and complete your income tax return filing accurately and on time. If you are unsure whether Section 80GG applies to you or how the deduction affects your tax liability, professional guidance can help you avoid costly mistakes.