Section 80GG: Rent Deduction Without HRA and the Own-Home Test

Last updated: Oct 2026

Section 80GG is the rent deduction for people who get no house rent allowance (HRA). The deduction is small, and the ownership test decides whether you get it.

• Deduction: the smaller of Rs. 5,000 a month, 25% of total income, or rent minus 10% of total income
• Maximum: Rs. 60,000 a year
• Fails if: you, your spouse, your minor child or your Hindu Undivided Family (HUF) own a home where you live or work
• Fails if: you own a home elsewhere and use it as self-occupied

• Regime: old regime only

  
  

If you own a flat in another city and let it out, you can still claim. If you keep it for your own use, you cannot.

Section 80GG allows a deduction for rent you pay on a home you live in, when your employer pays no HRA. Salaried people and self-employed people can both claim it. A person who receives HRA claims the HRA exemption instead.

The Income Tax Act, 2025 carries the provision as Section 134. For assessment year (AY) 2026-27 and earlier, Section 80GG of the 1961 Act applies. The deduction is allowed only in the old regime.

You can claim if 5 conditions hold together.

You must also file Form 10BA. The guide to Form 10BA explains the filing.

It blocks the claim only if you occupy that home yourself. The statute excludes accommodation that you own at another place and occupy, with its value fixed under Section 23(2)(a) or 23(4)(a).

If the home is vacant, your tax professional should confirm how it is valued. A home loan on a let-out flat does not block the claim. Interest on a let-out home is deductible, but the loss you can set off against other income is capped at Rs. 2 lakh a year.

You can claim the smaller of 3 figures, capped at Rs. 60,000 a year.

Formula used: Deduction = smaller of (Rs. 5,000 × 12, 25% of total income, rent paid − 10% of total income).

Total income here excludes certain gains and is computed before this deduction. Sources differ on whether other Chapter VI-A deductions are subtracted first. The examples assume none.

Consider Priya, a 32-year-old engineer in Bengaluru with a total income of Rs. 9 lakh, a household income of Rs. 90,000 a month and a CIBIL Score of 748. She pays Rs. 20,000 a month, gets no HRA, and owns a flat in Nagpur bought with a home loan.

The claim saves Rs. 12,480 in the old regime. Priya lets the flat out, so the loan interest also offsets the rent. For the regime comparison, see the guide to Form 10BA.

Rent does not change your eligibility with Bajaj Finance, but your existing EMIs do. If you plan to buy where you rent, plan the Equated Monthly Instalment (EMI) against your net income.

Approval timelines can extend where existing EMIs and income need cross-checking, and minimum income thresholds can differ by city. Check your home loan eligibility and test the EMI with the home loan EMI calculator.