Income Tax Deduction Under Section 80GG – Can you Claim Tax on Vacant Flat?


My wife and I both own one flat each in Panvel. Now we want to take a bigger flat on leave and licence for five years in Thane, a different city in the same district. We both will share the rent in the ratio of 50:50. The rent payable is around 50,000 per month. We may let out our flats in Panvel. I want to know whether we both can claim deduction under Section 80GG for rent paid in Thane under both the circumstances i.e. (i) if we let out our flats in Panvel or, (ii) if we keep those flats vacant, available for our occupation?

-Shailendra Dangre

By Balwant Jain, Chief Editor, ApnaPaisa

Section 80GG of the Income Tax Act, allows deduction to the salaried, who are not in receipt of any House Rent Allowances from their employers, and to all self employed who pay rent for any residential accommodation occupied by them. The deduction is allowed only if the rent paid during the years exceeds 10% of the total income after all the deductions. The deduction is available @ 5,000 per month subject to a maximum of 25% of the total income. However this deduction is not available in case you, your wife, any minor child or your HUF owns a house in the same city in which you are living and paying rent even if that house has been let out.

Moreover you cannot claim deduction under Section 80GG if you own a house at any other place and which is used by you for your own occupation. Even if one out of the two flats is kept for your occupation, the owner of that flat will not be able to claim this deduction.

So, if you and your wife will let out your flats at Panvel, both of you will be able to claim the deduction under Section 80 GG. Since the details about your total income are not available with me, the exact amount of deduction available to you cannot be quantified.


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