80GG

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This discussion explores whether a bank employee in Mumbai, whose employer provides leased accommodation and adds a portion of the rent as a perquisite, can claim a deduction under Section 80GG. The employee pays ₹8,000 monthly, with the bank covering the remaining ₹50,000 of the ₹58,000 lease rent. The key question is whether the employee is eligible for 80GG, particularly since they don't receive HRA and pay rent from their own funds, and if owning property elsewhere affects eligibility.

swasti

swasti (Querist)

13 March 2020 A bank employee is posted at Mumbai. Bank has provided him leased accomodation of which lease rent is paid directly by bank and added as perquisite in the hands of employee. Total Rent per month is Rs 58000 out of which bank pays lease rent Rs 50,000 p.m. and the balance Rs 8,000 is paid by the employee. The bank employee is having one house property in an other city situated in India but because of his job he has to live in Mumbai.

Is he eligible to claim deduction U/s 80GG in such case? Please suggest.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 March 2020 As leased accommodation is provided 80GG deduction not available.

swasti

swasti (Querist)

14 March 2020 Thanks Sir. Just small query again.
(1) Since HRA is not a part of his salary and he is paying Rs 8000/- from his pocket which is additional to his eligibility. Wouldn't he be eligible for 80GG as he is not claiming deduction U/s 10(13) and paying rent from his pocket also.
(2) Could he be denied 80GG deduction as per Provision(ii) of Sec 80GG as the employee is having a joint property in the name of himself and his wife in other city in India. He is claiming deduction of Housing Loan interest on the same.
(3) If answer to (2) is yes, and perhaps he is not availing the deduction U/s 24 for Interest, what would be the equation.

Please guide Sir. Thanks a lot.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 March 2020 Lease rent is directly paid by bank which will be considered as HRA payment hence 80GG not eligible.

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