Can Non-Salaried Individuals Also Claim HRA? Know All the Rules and Regulations Before Filing Your ITR..
Most people living in rented accommodation consider HRA (House Rent Allowance) to be the primary avenue for tax savings. However, the benefit of HRA is available only to those individuals for whom it is included as a component of their salary package.
This is precisely why millions of freelancers, consultants, YouTubers, doctors, lawyers, and small business owners often assume that they cannot avail of any form of income tax relief regarding their rent payments. In reality, however, the Income Tax Act contains specific provisions designed for such individuals as well.
**How can one claim a tax exemption on rent if they do not receive HRA?**
Even if you do not receive a House Rent Allowance (HRA) from an employer, you can still claim a tax deduction on rent under Section 80GG of the Income Tax Act, 1961.
This provision is specifically designed for individuals who reside in rented accommodation but whose income is not received in the form of a salary or whose salary structure does not include HRA. However, this benefit is available only to taxpayers who opt for the *Old Tax Regime*. This deduction is not available under the *New Tax Regime*.
**Who is eligible to benefit from Section 80GG?**
To avail of the benefits under Section 80GG, a taxpayer must fulfill all the prescribed conditions.
First and foremost, the individual must not be receiving HRA from any employer.
The second condition is that the individual must be paying regular rent for the accommodation they occupy, and the said accommodation must be utilized for residential purposes.
Additionally, it is mandatory to submit Form 10BA. This serves as a declaration form through which the taxpayer certifies that they fulfill all the eligibility criteria stipulated under Section 80GG.
**What is the difference between HRA and Section 80GG?**
**Basis:** HRA Exemption | Section 80GG
**Eligibility:** Salaried Employees | Non-salaried individuals or those not receiving HRA
**Basis:** Salary Structure | Rent Payment
**Maximum Benefit:** Depends on Income and Rent | ₹60,000 per annum
**Form Requirement:** No | Form 10BA is Mandatory
**Tax Regime:** Old Regime | Old Regime
This constitutes the most significant difference. The exemption available under HRA can be substantially higher in many cases, whereas Section 80GG imposes an annual maximum limit of ₹60,000.
**How much tax exemption is available, and how is it calculated?**
The deduction available under Section 80GG is equivalent to the *lowest* of the following three amounts:
₹5,000 per month (₹60,000 per annum)
25 percent of total income
Actual rent paid minus 10 percent of total income
For example, if an individual has an annual income of ₹8 lakh and pays ₹1.80 lakh in rent over the year, the maximum deduction—even after calculation—remains capped at ₹60,000. In other words, paying a higher amount of rent does not guarantee a tax exemption on the entire rent amount paid.