80GG rent deduction (no HRA).
Eligible deduction
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Tax saved
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Your breakdown
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The rent deduction for people who get no HRA
Section 80GG exists for a specific gap. If you pay rent but your salary has no House Rent Allowance component, or you are self-employed, you cannot use the usual HRA exemption under Section 10(13A). 80GG is your route instead. It is far less generous than HRA, but for a freelancer or a salaried person on a CTC with no HRA line, it is the only way to get any tax relief on rent paid.
The deduction is the least of three figures: ₹5,000 a month (₹60,000 a year), 25 percent of your total income, and rent paid minus 10 percent of total income. You take whichever of these three is smallest. That ₹5,000 monthly ceiling is low and has not been revised in years, and Budget 2025 left it unchanged, which is the main weakness of this section for tenants in expensive cities.
Running the least-of-three test
Take a self-employed consultant with total income of ₹9 lakh paying annual rent of ₹2.4 lakh. The three candidate figures are computed and the smallest wins.
The ₹60,000 fixed cap is the binding constraint here, well below the other two figures. This is the usual outcome: for most renters the ₹5,000 a month limit decides the deduction, which is why 80GG rarely shelters more than ₹60,000. The bars below show all three candidates side by side, with the shortest one being what you actually get.
Who is barred from claiming, and the Form 10BA step
There are hard eligibility limits. You cannot claim 80GG if you, your spouse, your minor child, or your HUF own residential property in the city where you live and work. You also cannot claim it if you own a house elsewhere that you treat as self-occupied. And you must file Form 10BA, a declaration that you are paying rent and meet the conditions, before filing your return; skipping this is the single most common reason a genuine 80GG claim is rejected. If your annual rent exceeds ₹1 lakh, you also need the landlord’s PAN.
Can salaried employees use 80GG?
Yes, but only if their salary structure has no HRA at all. If you receive even a small HRA, you must use the HRA exemption route under Section 10(13A) and cannot switch to 80GG. The two are mutually exclusive for the same period.
Is 80GG available in the new tax regime?
No. 80GG is an old-regime deduction. Under the new regime there is no rent deduction at all, neither HRA exemption nor 80GG, so renters who rely on this benefit need to weigh it when choosing between regimes for FY 2025-26.
Is 80GG even worth the paperwork?
Be honest with yourself about the size of the benefit. Because the ₹5,000 a month cap usually binds, the maximum deduction is ₹60,000, which at a 20 percent slab saves ₹12,000 and at 30 percent saves ₹18,600 including cess. For a salaried person with a proper HRA component, the regular HRA exemption is almost always larger, so 80GG is genuinely the fallback for those who simply have no HRA at all. My practical advice to consultants and freelancers: claim it, the ₹12,000 to ₹18,600 is real money, but do not restructure your life around it, and never inflate rent receipts to chase a bigger number. The department cross-checks landlord PAN and rent above ₹1 lakh a year, and a bogus claim invites a notice that costs far more than the deduction saved.
One more nuance the calculator does not model: the "total income" used in the 25 percent and 10 percent computations is your income before the 80GG deduction itself but after other Chapter VI-A deductions like 80C and 80D. Getting that base figure right matters, because a lower total income shrinks both the 25 percent ceiling and the 10 percent subtraction, which can change which of the three candidates wins.