Yes, you may be able to get a deduction on rent paid even if you're self-employed and don't receive House Rent Allowance (HRA). However, the way you claim this deduction depends on how the rent is used: 1. For Your Residential Rent (Personal Use) – Section 80GG Who Can Claim: Individuals (salaried oRead more
Yes, you may be able to get a deduction on rent paid even if you’re self-employed and don’t receive House Rent Allowance (HRA). However, the way you claim this deduction depends on how the rent is used:
1. For Your Residential Rent (Personal Use) – Section 80GG
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Who Can Claim:
- Individuals (salaried or self-employed) who do not receive any HRA and do not own a residential property in the city where they live.
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What It Offers:
- You can claim a deduction on the rent paid under Section 80GG.
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How the Deduction Works:
- The deduction amount is the least of the following:
- ₹5,000 per month (i.e., up to ₹60,000 per year),
- 25% of your total income, or
- The actual rent paid minus 10% of your total income.
- The deduction amount is the least of the following:
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Important Conditions:
- You must not own any residential property at your place of work.
- You should not be receiving HRA from any employer.
2. For Business-Related Rent (Office/Workplace)
- Claim as a Business Expense:
- If you are renting office space or a workspace solely for your business, the rent expense is typically allowed as a business expense.
- This expense can be fully deducted while computing your taxable business income, provided it is wholly and exclusively incurred for business purposes.
Final Thoughts
- Section 80GG helps self-employed individuals or any taxpayers who don’t receive HRA to get some relief on their residential rent.
- If you’re renting for business purposes, you can deduct the rent as a business expense.
- It’s important to maintain proper documentation (rental receipts, lease agreements, etc.) to support your claim.
By understanding these options, you can ensure that you make the most of the tax benefits available, even if you’re self-employed and not receiving HRA.
Read: Can I claim a deduction of rent paid in both section 80GG and 10(13a) HRA?
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While donations made to the PM CARE Fund qualify for a 100% deduction under Section 80G of the Income Tax Act, you must have proper documentation to claim the benefit. Key Points: Eligibility for Deduction:Donations to the PM CARE Fund are eligible for deduction under Section 80G if they are made thRead more
While donations made to the PM CARE Fund qualify for a 100% deduction under Section 80G of the Income Tax Act, you must have proper documentation to claim the benefit.
Key Points:
Eligibility for Deduction:
Donations to the PM CARE Fund are eligible for deduction under Section 80G if they are made through eligible modes (like cheque, online transfer, etc.) and the fund is registered for this benefit.
Importance of Receipts:
To claim the deduction, the Income Tax Department requires you to provide proof of donation, typically in the form of an official receipt or certificate issued by the PM CARE Fund.
No Receipt, No Deduction:
If you do not have a receipt, you may not be able to claim the deduction on your tax return. The receipt serves as the evidence that the donation was made and is crucial for the tax audit process.
What You Can Do:
Try to obtain a duplicate receipt or certificate from the PM CARE Fund if possible.
If you made the donation online or via cheque, keep your bank statements or cheque details as supporting evidence. However, note that these may not always be accepted in place of an official receipt.
Final Thought:
See lessWhile the donation itself is eligible for a deduction under Section 80G, lacking the official receipt may result in disallowance of the deduction. It’s always best to secure and retain proper documentation when making such donations.