Income tax _80gg

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This discussion clarifies whether rent paid in cash can be claimed as a deduction under Section 80GG of the Income Tax Act. To claim the deduction, you must file a declaration in Form 10BA, detailing all rent paid, whether by cash or cheque. While there isn't a specific limit on the cash amount you can pay, the maximum deduction you can claim is capped at £5,000 per month, subject to specific calculations based on your actual rent paid and adjusted total income.

Kowsalya

Kowsalya (Querist)

20 September 2021 Can deduction under section 80GG be claimed if the rent is paid in cash?If yes, is there any limit for the payment of rent in cash?

Thanks in Advance

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

20 September 2021 As per section 80GG w.r.t. Rule 11B, the assessee has to file Declaration under Form 10BA. There you have to declare total amount of rent paid by Cash/Cheque.

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Kowsalya

Kowsalya (Querist)

20 September 2021 Thank you sir for your prompt reply.
Is there any limit for payment of rent in cash?

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Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

20 September 2021 As such there is no limit specified, because the maximum deduction P.M. is only Rs. 5,000/- subject to the following conditions.

Quantum of deduction shall be the least of the following:
a. Actual Rent paid minus 10 percent the adjusted total income.
b. 5,000/- per month.
c. 25% of Adjusted Total Income.

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