The smallest of three figures: the rent you paid less ten per cent of your total income, twenty-five per cent of your total income, and a monthly ceiling stated in the section. The floor bites first - if your rent is under a tenth of your total income there is no deduction at all - and the monthly ceiling usually decides the claim. It is closed entirely to anyone with income falling within s.10(13A), and closed by the proviso if a residential house is owned by you, your spouse, your minor child or your HUF at the place where you live or work, or if you own and occupy a house elsewhere whose value is taken as self-occupied under s.23. Rule 11B makes the deduction conditional on filing the declaration in Form No. 10BA.
Section 80GG is the rent deduction for the person the house rent allowance rules do not reach: the salaried employee whose pay packet carries no HRA, and the self-employed person who has no employer to give him one. It is not a version of the HRA exemption and it is not generous. It gives, in the words of the section, a deduction of "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 two thousand rupees per month or twenty-five per cent. of his total income for the year, whichever is less". Everything a practitioner needs to know about the arithmetic is in that one sentence, and it is worth reading it as three separate operations rather than as a formula.
The three limbs, in the order the statute performs them. First, a floor: rent actually paid, less ten per cent of total income. Only the excess is deductible, so a person whose rent is below a tenth of his total income gets nothing at all - the section deducts the excess, not the rent. Second, a monetary ceiling per month. Third, a proportionate ceiling of twenty-five per cent of total income for the year. The words "whichever is less" attach to the second and third limbs, so the deduction is the smallest of: (rent paid minus ten per cent of total income), the annualised monthly ceiling, and twenty-five per cent of total income. A claim is worth working from the bottom up - compute all three and take the lowest - because it is common for the monthly ceiling alone to reduce a large rent claim to a small figure.
On the monetary ceiling, a warning that this page must give rather than paper over. The print of s.80GG used here reads "two thousand rupees per month". That print carries amendment notes for the 1998 insertion of the section and for the 2001 substitution in the proviso, but it shows no note against the monthly figure, and the monthly figure is the limb of this section that Finance Acts revise. This page therefore does not tell you the ceiling in force for the year you are computing. Take it from the section as amended for that assessment year, and do not carry the figure printed above into a current return without checking it.
What "total income" means here is fixed by the Explanation, and it is narrower than practitioners assume. The Explanation reads, in full - and the internal quotation marks are the statute's own: 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. The Explanation carves out one thing and one thing only - this section's own deduction, which it has to, or the computation would chase its own tail. It does not say gross salary, it does not say gross total income, and it does not disapply the other deductions the Act allows in arriving at total income. So the base is total income as the Act computes it, with s.80GG itself added back, and nothing more is read into it than that.
The first disqualification is at the front of the section, before any of the arithmetic: the deduction is given in computing the total income of "an assessee, not being an assessee having any income falling within clause (13-A) of section 10" (the source prints the clause as "(13-A)"; it is the house rent allowance clause). Read what that bars. It is worded on having income falling within s.10(13A), not on being paid an allowance that an employer labels HRA. The section does not go on to say what happens where an employee receives an HRA on which no exemption at all is available - where he pays no rent, or where the s.10(13A) computation comes out at nil - and this page does not answer that. What is clear is the ordinary case the section is built for: a person with no s.10(13A) income at all.
The second set of disqualifications is the proviso, and it is where most claims actually fail. "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." (The spacing of the clause markers in the printed text is irregular and is normalised in this quotation.) Note four things about limb (i). The ownership that disqualifies is not only the assessee's - a house owned by his spouse, by his minor child, or by the HUF of which he is a member does it just as effectively. The list stops there: a house owned by an adult child, a parent, a brother or a firm is not in it. The place that matters is stated in the alternative - where he ordinarily resides, or performs the duties of his office or employment, or carries on his business or profession - so a claimant who lives in one city and works in another has to be clear of ownership in both. And limb (i) is unqualified by occupation or by value: it asks only who owns a residential accommodation at that place. A house at the place of work that is let out, or lying vacant, or occupied by a relative, still answers the description.
Limb (ii) does something different and is keyed to how the property is taxed, not to where it is. It reaches accommodation owned by the assessee "at any other place" - anywhere else - but only where two further things hold: the accommodation is "in the occupation of the assessee", and its value "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", which are the self-occupied-property provisions. So the combination the proviso is aimed at is the taxpayer who takes the benefit of a nil annual value on a house of his own somewhere else and also claims rent relief where he lives. Because limb (ii) turns on the property being in his occupation and its value falling to be determined under those clauses, it does not on its face reach a house at another place that is let out and whose rent is offered to tax. That is what the words do; whether an officer will read them that way on particular facts is not something these two texts settle.
The declaration. The section allows the deduction "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", and the prescription is Rule 11B of the Income-tax Rules, 1962 - not Rule 11A - headed "Conditions for allowance for deduction under section 80GG". The Rule is one sentence and it carries the declaration this section is known for: "The deduction to be allowed under section 80GG in respect of any expenditure incurred by an assessee towards payment of rent for any furnished or un-furnished accommodation occupied by him for the purposes of his own residence shall be allowed subject to the condition that the assessee files the declaration in Form No. 10BA." That is the whole of the Rule as printed at the source. Two consequences. Filing Form 10BA is not housekeeping - the Rule frames it as the condition on which the deduction is allowed, so a claim made without it is a claim made without the prescribed condition satisfied. And the Rule as printed says nothing else: not what Form 10BA contains, not who it is furnished to, not when, not whether it precedes the return, and not what the landlord's details or PAN requirements are. None of that is in either text this page is built on, and none of it is stated here.
Notice also what the Rule does not contain. The section invites the prescribing authority to lay down conditions "having regard to the area or place in which such accommodation is situated" - the hook for a metro versus non-metro distinction of the kind s.10(13A) and Rule 2A carry. Rule 11B as printed draws no such distinction and prescribes nothing about area or place at all. Under these two texts, s.80GG's three limbs apply the same way wherever the accommodation is.
The Income-tax Act 2025. The department's own 1961-to-2025 concordance maps s.80GG to s.134 of the Income-tax Act 2025 (Deductions in respect of rents paid). The text of s.134 was not before me, so this page describes none of it - not its limbs, not its figures, not its conditions, and not whether it carries a Form 10BA equivalent. Take the number from the concordance and read s.134 itself. And read it knowing that a concordance mapping is an administrative aid to finding the successor provision; it is not a holding that the old position continues unchanged, and it says nothing about whether anything decided on s.80GG governs s.134.
This is the only rent relief in the Act for someone the HRA machinery does not reach, and it is the deduction a salaried person without an HRA component and a self-employed person paying city rent will both ask about. What changes conduct is that the money is rarely what the client expects and the disqualifications are wider than he expects. The arithmetic is not "rent, capped" - it is rent minus a tenth of total income, then squeezed by a monthly ceiling and a twenty-five per cent ceiling, so a large rent can produce a small deduction and a modest rent can produce none. The proviso then reaches sideways into the family: ownership by a spouse, a minor child or the HUF at the place of residence or work ends the claim although the assessee owns nothing, and limb (i) does not care whether that house is occupied, let out or empty. And the claim is conditional on a declaration - Rule 11B allows the deduction "subject to the condition that the assessee files the declaration in Form No. 10BA" - so a claim made in the return alone is a claim made without the prescribed condition met.
I live in my own house and earn nothing from it. Can Parliament tax me on a notional annual value as income from house property?
My client owns a one-third share in the house he lives in with his brothers. The officer has computed the relief on the whole property and then split the balance three ways. Is that right?
I booked a flat years ago and have been paying the home loan, but the builder and the society are in litigation and I still have no possession. The officer has disallowed my s.24(b) interest because I do not occupy the flat. Can he do that?
The AO clubbed my wife's rental income with mine and denied my HRA. Is that right?
My employees claim HRA and home loan interest together. Must I treat that as a double benefit?
I pay rent to my wife, who owns the flat. Will my HRA exemption survive?
I pay rent to my wife for the flat she owns and we live in it together. The officer says the whole thing is a colourable device and has disallowed my HRA. Is living under the same roof as my landlord by itself fatal?
I owned two houses at the start of the year and sold one in July. I treated the second house as deemed let out for those first months and claimed the full section 24(b) interest for that period. The Assessing Officer says there is no such thing as a split-year claim and has capped me at Rs 2,00,000. Who is right?
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