1. The 3-Condition Statutory Formula
Under Section 80GG of the Income Tax Act, 1961, the deduction allowed is the LEAST of the following:
- ₹5,000 per month (Capped at ₹60,000 per financial year).
- 25% of Adjusted Total Income.
- Actual Rent Paid minus 10% of Adjusted Total Income.
2. Section 10(13A) vs Section 80GG Comparison
| Feature | Section 10(13A) (HRA) | Section 80GG (Rent Deduction) |
|---|---|---|
| Target Assessee | Salaried employees receiving HRA | Self-employed & non-HRA salaried |
| Maximum Limit | No statutory cap | Max ₹5,000/mo (₹60,000/yr) |
| Mandatory Declaration | Form 12BB (to employer) | Form 10BA (on e-filing portal) |
3. Electronic Filing of Form 10BA
Before filing your ITR-1, ITR-3, or ITR-4, you must log into eportal.incometax.gov.in, navigate to e-File > Income Tax Forms > File Form 10BA, enter the tenancy details, and e-verify using Aadhaar OTP.
Compare HRA Exemption vs Section 80GG
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