Section 80GG — Rent without HRA

How 80GG works

Section 80GG is the rent-relief escape valve for salaried employees who don't receive HRA (or whose CTC doesn't structure one) and for self-employed earners paying rent in a city where they don't own a residence. The deduction is the least of these three numbers: (a) ₹5,000 per month i.e. ₹60,000/year, (b) 25% of adjusted total income, or (c) actual rent paid minus 10% of adjusted total income. You must file Form 10BA declaring the rent payment. Only available under the old tax regime.

Worked example

A Pune freelance designer earning ₹10 lakh net (after business expenses) pays ₹18,000/month rent (₹2.16L/year). The three caps: (a) ₹60,000, (b) 25% × 10L = ₹2.5L, (c) ₹2.16L − ₹1L = ₹1.16L. The least is ₹60,000, which is the deduction allowed. At a 20% slab the saving is ₹12,480 including cess — modest, but worth claiming since the alternative is zero. High-rent metro cities expose the ₹5k/month ceiling as the binding limit for almost everyone.

When to use this

• Salaried without HRA in CTC (rare — usually startups or government roles)
• Self-employed, freelancers, partnership firm partners renting a home
• You, your spouse, minor child or HUF don't own a property in the same city
• Old regime filers only — new regime ignores 80GG entirely

If you do get HRA in your CTC, use the standard HRA exemption via our HRA calculator — it's almost always more generous than 80GG's ₹60k cap. Read our HRA exemption rules guide for the full comparison.