Rent Deduction Without HRA: 80GG is Now Section 134
- Section 80GG renumbered as Section 134 under the new Act. Substance unchanged.
- Available only if you do NOT receive HRA from any employer during the year.
- Deduction is the lowest of: Rs 5,000 per month, rent paid minus 10% of total income, or 25% of total income.
- File Form 10BA declaring you do not own a self-occupied house in the same city. Only in the old regime.
If you pay rent but your employer does not give you HRA (House Rent Allowance), you can still claim a deduction for rent paid. Under the old act, this was Section 80GG. Under the new Income Tax Act 2025, Section 80GG is now Section 134.
Section 80GG → Section 134: What Changed
The section number changed. The eligibility criteria, calculation method, and limits remain the same.
Who Qualifies for This Deduction
Section 134 is specifically for people who pay rent but cannot claim HRA exemption. You qualify if:
- You are an individual taxpayer - self-employed, freelancer, or salaried person whose employer does not pay HRA
- You do not receive HRA from your employer. If you receive HRA (even a small amount), you must claim the HRA exemption under Section 11(13A) instead, not Section 134
- You (or your spouse or minor child) do not own a house at the place where you work or live. If you own a house in the same city, you cannot claim this deduction
- You do not own a house anywhere that you claim as self-occupied for tax purposes
- You actually pay rent for your accommodation
How the Deduction Is Calculated
The deduction under Section 134 is the lowest of these three amounts:
- Rs 5,000 per month (Rs 60,000 per year)
- 25% of your total income (total income here means income before this deduction)
- Actual rent paid minus 10% of total income
Let us work through an example. Say your total income is Rs 6,00,000 and you pay rent of Rs 15,000 per month (Rs 1,80,000 per year):
- Option 1: Rs 5,000 x 12 = Rs 60,000
- Option 2: 25% of Rs 6,00,000 = Rs 1,50,000
- Option 3: Rs 1,80,000 - (10% of Rs 6,00,000) = Rs 1,80,000 - Rs 60,000 = Rs 1,20,000
The lowest is Rs 60,000. So your deduction under Section 134 would be Rs 60,000.
Section 134 vs HRA Exemption: Pick One
For salaried, when HRA is part of salary
Under Section 11 (old 10(13A)). Often significantly higher than Section 134, capped only by the three-way least-of test on basic salary. Use this route if your employer pays HRA.
For self-employed and HRA-less salaried
Capped at Rs 5,000 per month (Rs 60,000 per year). Available even to freelancers and businesses. You file Form 10BA. Use only when HRA route is not available.
You cannot claim both. Self-employed individuals can only use Section 134 since they have no employer to pay HRA. If your employer offers to restructure salary to include HRA, that is usually a better deal than the Rs 5,000/month Section 134 cap.
Documentation Required
Signed by your landlord, ideally with revenue stamp if monthly rent above Rs 5,000.
Mandatory if total annual rent exceeds Rs 1,00,000. Get this before you start paying rent.
Stamp paper agreement signed by both parties. The address must match what you declare in your ITR.
Mandatory. You declare that you do not own a self-occupied house in the same city. Filed with your ITR.
Under the new regime (default since FY 2023-24), Section 134 is not available. Rent paid to your spouse never qualifies. Rent paid to parents is allowed only if the arrangement is genuine, your parents declare the rental income, and payments are by bank transfer.
Frequently Asked Questions
Can I claim rent deduction if I do not get HRA?
Yes. Section 134 (old 80GG) allows a deduction for rent paid by individuals who do not receive HRA from their employer. Available to self-employed persons, freelancers, and salaried employees without HRA.
What is the maximum rent deduction under Section 134?
The deduction is the lowest of Rs 5,000 per month, 25% of total income, or rent paid minus 10% of total income. The effective cap is Rs 60,000 per year.
Can I claim both HRA and 80GG deduction?
No. You can claim either HRA exemption under Section 11 (old 10(13A)) or rent deduction under Section 134 (old 80GG), never both. If you receive any HRA from your employer, you must use the HRA route.
Is Section 134 rent deduction available in the new tax regime?
No. Section 134 (old 80GG) deduction is available only under the old tax regime. Under the new regime (default since FY 2023-24), this deduction is not available.
If your employer DOES pay HRA, use that route instead. See HRA exemption now Section 11. For the regime trade-off that determines whether Section 134 even applies, see new regime vs old regime.
Disclaimer: This article provides general information about the Income Tax Act 2025 and is not tax advice. Consult a qualified Chartered Accountant for advice specific to your situation.
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