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
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