Income Tax Deduction in respect of Rent Paid under Section 80GG of the Income Tax Act, 1961.Section 80GG is applicable to individual salaried taxpayer who is not receiving House rent allowance (HRA) and should not own any residential accommodation. Then individual can claim deduction for rent paid subject to maximum of Rs 2,000/- per month.

Conditions and Calculation for deduction under section 80GG
1. The taxpayer should be an Individual

2. The taxpayer is an employee but he does not get house rent allowances during the previous year from the employer

3. The taxpayer files a declaration in form no. 10BA* regarding the expenditure incurred by him towards payment of rent.

4. The persons (taxpayer, spouse, adopted/minor child or HUF of which the taxpayer is member) should not own any residential accommodation.

5. If the taxpayer owns a residential accommodation at any other place, then in respect of that house the concession is not claimed by him [under sec. 23(2)(a) or 23(4)9a).

Amount of deduction-
Least of the following-
Rs. 2,000 per month
25 % of adjusted GTI
The excess of actual rent paid over 10% of total income.
Actual amount paid

Adjusted GTI=
Gross total income
Less: Long term capital gains
Less: Short term capital gain (at the rate of 15%)(sec.111A)
Less: Income referred to in (sec. 115A or 115D)
Less: Amount deductible (80CCC to 80U)( except 80GG)
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
Total income for the purpose of section 80GG XXXXX

Notes:-
1. If the assessee resides in a concessional house provided by the deduction in respect of rent paid can be claimed under this section.
2. The assessee must submit a declaration in Form No. 10BA along with the return of income.