How to claim deduction under section 80gg ?

How to claim deduction under section 80gg ?

What is dedcution under section 80gg ?

Income tax Act 1961 has various provision to allow deduction to assessee from total taxable income during the relevant assessment year. These deduction mention in chapter VI A of income Tax Act.

How do i claim  80gg deduction ?

Who can claim deduction under 80GG ?

Normally employee get house rent allowance from his employer  in respect of own residence. Such employee can get deduction of rent from taxable salary. if any employer do not provide HRA as part of salary to  a employee  or a business man or self employed  can claim deduction under section 80GG with certain condition.

Condition to claim dedction 80gg

1.This deduction is allowed to an individual.

2.The individual  should pay rent for own residance,whether furnished or unurnished.

3. The individual is self employed or if he is an employee he is neitherentitled to any house rent allowance nor a rent free accommodation.

4. The individual  should not has own house(Own house include house of spouse,minor, HUF)  at such work palce.

5. Such individual should fulfill such other condition or limitation .

 Amount of deduction:

The deductionshall be the minimum of the following.

1    Rs.5,000 per month

2.   Excess of rent paid over 10% of Adjusted total income

3.   25% of the adjusted total income

Adjusted total income mean

i . any income referred to in sections 115A to 115D

ii.  Reduce Long term capital gains form total income  if any

iii. Reduce all  allowable deduction except 80gg

 

 

Can i claim 80gg if i  get HRA ?

If you are employee of any orgnation and receive house rent allowance than you can not claim deduction uder section 80gg.

 Example 1

Mr.  Swami  is working in Sankhla ltd his salary is Rs. 6,00,000 per year. He didnot received house rent allowance from Sankhla Ltd. He paid  house rent Rs, 10,000 per months. He invest Rs. 60,000  in LIC during the year

Calculate  allowable deduction under section 80gg

Solution

Computation of total income for assessment year 2022-23

Income from salary                                                          Rs.6,00,000

Less: Standard deduction                                               Rs.50,000

Gross Total income                                                                Rs. 5,50,000

Less ; Deduction under section 80 C                     Rs.60,000

Total income before deduction 80GG                      Rs.4,90,000

Less Deduction 80gg                                                            Rs.60,000

Taxable total income                                                           Rs.4,30,000

Computation of deduction 80 gg

(i) Rs. 60,000

(ii)    Rs.61,200        Rs.5,100 ( 10,000-4900( 10% of 4,90,000 )}

(iii)    Rs.1,22,500                 (   25%  of Rs4,90,00)

so Rs.60,000 is allowable

 

 Example 2

Mr.  S  is working in Sankhla ltd his salary is Rs. 6,00,000 per year. He  received house rent allowance Rs.1,20,000 per year from Sankhla Ltd. He paid  house rent Rs, 10,000 per months. He invest Rs. 60,000  in LIC during the year

Calculate  allowable deduction under section 80gg

Solution

Computation of total income for assessment year 2022-23

Mr. S can not claim deduction under section 80gg because he received HRA for his employer.

 

Example -3

Mr. Yogi is a business man  in Jammu and Kashmir his  gross total income is Rs.10,00,000. He  does not have own house in  Jammu and Kasmir. He paid rent Rs. 13,000 per month. He also invest in public provident fund Rs.80,000  during the financial year 2021-22

 

Calculate  allowable deduction under section 80gg

Solution

Income from business                                                          Rs.10,00,000

Gross Total income                                                                Rs. 10,00,000

Less ; Deduction under section 80 C                     Rs.80,000

Total income before deduction 80GG                      Rs.9,20,000

Less Deduction 80gg                                                            Rs.45,600

Taxable income                                                                  8,74,400

Computation of deduction 80 gg

(i) Rs. 60,000

(ii)    Rs.45,600        Rs.3800 ( 13,000-9200( 10% of 9,20,000 )}

(iii)    Rs2,30,000                 (   25%  of Rs9,20,00)

so Rs.45,600 is allowable under section 80GG

https://freetaxguru.in/what-are-the-benefits-of-filing-of-income-tax-return/

 

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