Section 80GG Rent Deduction: Current Section 134 Rules for Rent Paid
The deduction historically known as Section 80GG of the Income-tax Act, 1961 allowed eligible taxpayers who paid rent for their own residence, but did not receive qualifying HRA, to deduct a limited amount from total income. From 1 April 2026, the corresponding provision is Section 134 of the Income-tax Act, 2025.
Section 134 rent deduction at a glance
- The accommodation may be furnished or unfurnished but must be occupied for the assessee's own residence.
- The deduction is limited to the least amount produced by the statutory calculation, with an overall ceiling of Rs. 5,000 per month.
- Ownership of specified residential accommodation by the assessee, spouse, minor child or HUF can disqualify the claim.
- A taxpayer cannot claim this rent deduction where the statutory HRA-income restriction applies.
- Under the current rules, the prescribed declaration is Form 31. It corresponds to old Form 10BA.
What was Section 80GG of the Income-tax Act, 1961?
Section 80GG dealt with deduction for rent paid for residential accommodation. It applied where the assessee did not have income falling within the HRA exemption provision in Section 10(13A), and it imposed specific ownership restrictions. The original page correctly recorded the core limit as rent exceeding 10 per cent of total income, restricted to Rs. 5,000 per month or 25 per cent of total income, whichever produced the lower permissible deduction.
That provision remains relevant when examining a period governed by the Income-tax Act, 1961. It should not, however, be presented as the operative section number for a current tax year beginning on or after 1 April 2026.
Current provision: Section 134 of the Income-tax Act, 2025
Section 134 continues the deduction for expenditure on rent paid for furnished or unfurnished accommodation occupied by the assessee for his own residence. The deduction is subject to the statutory limits and prescribed conditions.
The allowable deduction is effectively restricted to the least of:
- Rent paid minus 10 per cent of total income;
- Rs. 5,000 per month; or
- 25 per cent of total income for the tax year.
Who can claim the rent deduction?
The provision is intended for an assessee paying rent for accommodation used as his own residence, subject to the conditions in Section 134 and the prescribed rules. It is particularly relevant where the taxpayer does not receive the HRA benefit that would prevent a claim under this rent-deduction provision.
For a claim, the taxpayer should be able to substantiate the rented premises, period of occupation, rent paid, mode of payment and landlord particulars required by the prescribed declaration.
When is the deduction not available?
Section 134 contains ownership restrictions broadly continuing the former Section 80GG framework. A claim is not available where residential accommodation is owned by the assessee, spouse or minor child, or by the HUF of which the assessee is a member, at the place where the assessee ordinarily resides, works or carries on business or profession. The section also restricts a claim where the assessee owns residential accommodation elsewhere that is in the assessee's occupation and is dealt with under the specified house-property valuation provision.
The current section also contains a restriction linked to income specified in Schedule III. Taxpayers receiving HRA-related income should therefore check the current statutory provision before claiming the deduction.
Form 31 under the Income-tax Rules, 2026
CBDT's current guidance identifies Form 31 as the declaration for an assessee claiming the deduction under Section 134. Form 31 corresponds to Form 10BA under the earlier Income-tax Rules, 1962. The current guidance states that Form 31 is filed along with the return of income and asks for basic taxpayer information, details of the rented premises, period of stay, rent paid, payment mode and landlord details.
| Earlier law | Current law from 1 April 2026 |
|---|---|
| Income-tax Act, 1961 | Income-tax Act, 2025 |
| Section 80GG | Section 134 |
| Income-tax Rules, 1962 | Income-tax Rules, 2026 |
| Rule 11B | Rule 65 |
| Form 10BA | Form 31 |
Old tax regime and earlier assessment years
For assessment years governed by the Income-tax Act, 1961, the Income Tax Department's filing guidance stated that Section 80GG was not available where the taxpayer used the new/default regime under Section 115BAC. For example, the Department's AY 2026-27 validation guidance lists Section 80GG among deductions that cannot be claimed in the new regime. Claims relating to an earlier year should therefore be tested under the law and return rules applicable to that year.
Example of the deduction calculation
Assume, only for illustration, that the relevant total income for the calculation is Rs. 6,00,000 and annual rent paid is Rs. 1,44,000. Rent exceeding 10 per cent of total income is Rs. 84,000. The monthly statutory ceiling produces Rs. 60,000 for a full year, while 25 per cent of total income is Rs. 1,50,000. The deduction would therefore be restricted to Rs. 60,000, subject to all other statutory conditions.
Official references
For current compliance, consult the Income-tax Act, 2025 and Income-tax Rules, 2026 resources published by the Income Tax Department and the Department's FAQs and guidance notes on forms under the Income-tax Rules, 2026.
This page is a general legal and tax information resource. The applicable provision depends on the relevant tax year and the taxpayer's facts.