Most salaried employees receive HRA and can claim a deduction for the same. When HRA is not allocated or if the taxpayer is self-employed, then the deduction can be claimed under section 80GG of the Income Tax Act, 1961, by filing form 10BA.

While there are a number of forms a taxpayer may be obligated to furnish, Form 10BA is filed to claim the deduction for the rent paid for rental property under section 80GG. The filing of the respective form is accomplished by submitting the required documents. Additionally, the taxpayer should also follow the step-by-step procedure in the e-filing portal to submit the Form. The following discussion would give a brief idea about the form and the filing formalities.

What is the Significance of Form 10BA of Income Tax Act?

Form 10BA is a statement to be recorded by a taxpayer who needs to maintain a tax deduction under Section 80GG for rent, settled on rental property. To claim the deduction under section 80RRB the following prerequisites have to be fulfilled: 

1. The taxpayer should not be getting House Rent Allowance from the respective employer
2. The taxpayer’s spouse and minor children, or if the assessee is a part of HUF (Hindu Undivided Family), then the HUF should not hold any self-occupied living accommodation.

If the above requirements are met, then the taxpayer can present a statement in Form 10BA. It is imperative that a taxpayer should present the Form 10BA of Income Tax Act before filing ITR.

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Meaning of Section 80GG of the Income Tax Act:

Section 80GG of the Income Tax Act, 1961 permits deductions provided certain conditions are met by the taxpayer as illustrated below:

• A deduction under Section 80GG can be claimed only by a self-governing person
• A person can be a salaried employee of some organization or can be self-employed
• If the taxpayer is a salaried employee, a deduction under this proviso can be claimed, if the taxpayer is not receiving any House Rent Allowance (HRA) from the employer
• The IT department holds the form 16 filing for the purpose of maintaining the results
• The taxpayer and the immediate family associated with the taxpayer like that of the spouse, minor children, or the HUF (Hindu Undivided Family) of which the taxpayer is a member, must not possess any degree of comfort for living in the place where the taxpayer is residing or working under employment or offering any kind of business or service
• The taxpayer should not possess any self-occupied residential property at any point in time.

For instance, consider the following scenario wherein the taxpayer was initially employed during the FY (Financial Year) 2019-20. The taxpayer, after 6 months, took to freelancing after quitting the job. While being employed, the HRA was availed by the taxpayer while not owning any self-governed residential property. Here, the said individual is eligible to claim a deduction under section 80GG and can file Form 10BA of Income Tax Act for the rent paid for the latter 6 months, as the taxpayer was neither receiving any allowance for paying the rent nor was possessing a self-occupied property.

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Details Required for Filing Form 10BA of Income Tax Act:

The following details are crucial to the filing of Form 10BA of Income Tax Act:

• PAN card details of the taxpayer
• Name and Address of the rental property the taxpayer resides in
• Name and address details of the landlord
• Details pertaining to the rental amount that was paid.

Prerequisite Documents for Claiming Deduction Under Section 80GG:

•   Rental agreement and rent receipts
•   If the rental amount exceeds ₹ 10,000, PAN details of the owner of the residential property
•   Form 10BA of Income Tax Act to show that the taxpayer has no self-occupied residence in the same or a different location.

Eligible for Deduction Under Section 80GG:

The lowest of the amount stated below will be considered when a deduction is claimed under Section 80GG:

• ₹5,000 on a monthly basis
• 25% of the income in total (Not including the long-term and short-term capital gains, Also the income referred to here, is the one the taxpayer has in hand before the deduction is made under Section 80GG)
• The actual rent, when it is less than 10% of the income.

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Procedure for Filing Form 10BA of Income Tax Act:

Form 10BA of Income Tax Act has to be submitted online to the IT department from the e-filing account of the taxpayer. This can be accomplished through the following steps:

• Step 1:

The taxpayer has to log in to the Income Tax e-filing portal by entering the Login credentials.

• Step 2:

The user has to navigate to the tab e-file and select the option Income Tax Forms from the drop-down list.

• Step 3:

The user has to select Form 10BA of Income Tax Act from the drop-down, and select the relevant Assessment Year. The user further has to select Submission Mode as Prepare and Submit Online and click Continue.

• Step 4:

The user has to provide details like the Name of the Landlord, Details of Rent Paid, etc. preview the form and submit it.

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Details to be Filled in Form 10BA of Income Tax Act:

The following information is to be provided while filing the form 10 BA:

•  Name and PAN details of the taxpayer
•  Address of the rental property
•  Total Rent Paid
•  Name and Address of the Landlord.

Most salaried employees receive HRA (House Rent Allowance) from their respective employers or organizations. Those employees who do not receive HRA or self-employed taxpayers who pay rent from their own pockets are eligible to claim a deduction under the stated provision. However, it is generally advised to furnish Form 10BA of Income Tax Act before the filing of Income Tax Returns under section 80U of the Income Tax Act, 1961: https://incometaxindia.gov.in/pages/acts/income-tax-act.aspx

FAQs

What is the Form 10BA in income tax?

Form 10BA of Income Tax Act is a declaration that is filed by a taxpayer claiming a deduction for rent paid when HRA (House Rent Allowance) is not received. It is a statement that allows individuals to claim tax benefits on the rent paid for accommodation if they are not eligible for HRA.

What is Form 10BA to claim deduction?

Form 10BA is used to claim a deduction under section 80GG of the Income Tax Act, 1961. This deduction is applicable to individuals who do not receive HRA from their employer and pay rent for their residential accommodation. By filing Form 10BA, they can claim tax benefits on the rent paid, subject to certain conditions.

Is filing of Form 10BA of Income Tax Act mandatory?

Yes, if an individual wants to claim the deduction for rent paid under section 80GG, they are required to file Form 10BA. It is mandatory to furnish this declaration to avail of the tax benefits on rent paid for residential accommodation when HRA is not received.

How do I claim deductions on U S 80GG?

To claim deductions under section 80GG, follow these steps:
● Ensure you do not receive HRA from your employer.
● File Form 10BA of Income Tax Act, declaring your eligibility for the deduction and providing necessary details.
● The deduction under section 80GG is the least of the following:
● Rent paid minus 10% of total income.
● Rs. 5,000 per month.
● 25% of total income.
● Claim the eligible deduction while filing your income tax return.

Where to submit Form 10BA of Income Tax Act online?

Form 10BA can be filed online through the income tax department's official website or the government's e-filing portal. Taxpayers can log in to their accounts and select the relevant form to fill in the required details and submit the declaration.

Do we need to file Form 10AB every year?

Form 10AB is not a form related to income tax deductions. It appears there might be a confusion or typo in the question. There is no such form as Form 10AB in the context of income tax returns or deductions.

Can Form 10B be filed after the due date?

Form 10B is used by charitable or religious trusts to report their income and expenses. If a trust is required to get its accounts audited under income tax laws, they must file Form 10B along with the audit report. If filed after the due date of filing the income tax return, there might be penalties or consequences as per income tax rules.

Can I claim 80GG and 24b?

Yes, you can claim both deductions, i.e., 80GG and 24(b), if you meet the respective conditions for both sections. Section 80GG allows deductions for rent paid when HRA is not received, while section 24(b) allows deductions on home loan interest. Ensure you fulfill the eligibility criteria and follow the necessary procedures to claim these deductions while filing your income tax return.

Other Related Articles:

• Section 80GG – Tax Claim Deduction for Rent Paid
• Form 10 Bb – Income Tax Department