Income Tax Deduction

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Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2011 I draw a STIPEND of RS 40,000 a month and it does not include any HRA element..Can i avail the deduction for the rent that i pay.If Yes under which section and upto which limits..Also if you could tell me whether investing in the Infrastructure bond is an option i should avail of as the returns are very low..

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

17 January 2011 You can avail the deduction u/s.80GG the limit is as follows

minimum of the

1.Rs.2000 per month
2. 25% of Gross total income
3. 10% of Gross total income less actual rent paid

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CA. Praveen Narayan

CA. Praveen Narayan (Expert)

17 January 2011

Quantum of deduction for rent paid

The deduction shall be the minimum of the following amounts:

* Rs. 2000 per month
* 25 percent of the Adjusted Total Income
* The excess of actual rent paid over 10 per cent of Adjusted total Income

Adjusted Total Income for calculation of deduction u/s 80GG

Adjusted total income, for the purpose, means the gross total income as reduced by:

* Long-term capital gains
* All deduction u/s 80CCC to 80U excepting deduction u/s 80GG
* Any income referred to in section 115A to 115D

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