Section 80GG vs HRA: Which Rent Benefit Applies?
Reviewed by CA Nikhil Gupta · Last reviewed 5 August 2026
Section 10(13A) applies when an employee receives HRA and pays rent.
Section 80GG is a separate old-regime deduction for an individual who does not receive HRA, subject to Form 10BA, ownership restrictions and a much lower ₹5,000-per-month ceiling limb.
Legal or Computational Framework
This article uses the AY 2026–27 framework for income earned in FY 2025–26 under section 10(13A) of the Income-tax Act, 1961 read with Rule 2A. For this period, and in the current official departmental material reviewed on 1 August 2026, the 50% salary limb is restricted to Mumbai, Kolkata, Delhi and Chennai; all other locations use 40%. HRA exemption is ordinarily unavailable under the default new tax regime, so regime selection is a threshold eligibility question. Section 80GG is governed separately and calculates the least of rent minus 10% of adjusted total income, 25% of adjusted total income, and ₹5,000 per month. Form 10BA is mandatory before claiming the deduction in the return.
Worked Example
A self-employed consultant pays rent of ₹2,40,000 and has adjusted total income of ₹8,00,000. The 80GG limbs are ₹1,60,000, ₹2,00,000 and ₹60,000. Deduction is ₹60,000. The same person cannot calculate a Rule 2A HRA exemption because no employer paid HRA.
What Generic Pages Miss
- Treating 80GG as a fallback after a low HRA claim.
- Using salary instead of adjusted total income for 80GG.
- Missing Form 10BA.
- Ignoring spouse/minor-child property ownership.
- Claiming both benefits for the same period.
Practical Documentation Checklist
- Salary structure showing no HRA, where employed
- Form 10BA acknowledgement
- Rent agreement and payment evidence
- Property ownership declarations
- Adjusted total income working
- Old-regime option
For the complete rules on this topic, see the core guide: HRA Exemption: Rules, Formula and Maximum Limit.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Finin2min Summary
Section 10(13A) applies when an employee receives HRA and pays rent. Section 80GG is a separate old-regime deduction for an individual who does not receive HRA, subject to Form 10BA, ownership restrictions and a much lower ₹5,000-per-month ceiling limb.
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Income Tax
- Official starting point
- www.incometax.gov.in
Page source links
Primary sources & related provisions
Statutory provisions referenced in this guide: