Tax-Saving Tips from Twinkle Jain: Understanding Section 80GG

Twinkle Jain, a renowned finance influencer and Chartered Accountant, is known for her valuable insights into the world of taxation and finance. One of the key areas she emphasizes is tax-saving, an essential aspect for both self-employed and salaried individuals. In this article, we will explore Twinkle's tips on how to save taxes by taking advantage of deductions under Section 80GG, a lesser-known provision that can be highly beneficial for those who do not receive House Rent Allowance (HRA).

Understanding Section 80GG

Section 80GG of the Income Tax Act allows individuals to claim a deduction for rent paid on their accommodation, even if they do not receive HRA as part of their salary. This provision is particularly useful for self-employed individuals or salaried employees who are not eligible for HRA. However, there are certain conditions that must be met to claim this deduction:

1. Eligibility: You must be either self-employed or salaried, and you should not have received HRA at any time during the year for which you are claiming the deduction.
2. Ownership: You, your spouse, your minor child, or the HUF of which you are a member should not own any residential accommodation at the place where you currently reside or perform your duties.
3. Property Ownership: If you own any residential property at any place, and its income is calculated as self-occupied property under the Income Tax Act, you are not eligible for the deduction under Section 80GG.
4. Documentation: You are required to file Form 10BA, detailing the payment of rent.

Eligible Amount for Deduction

The deduction under Section 80GG is the lowest of the following:

• Rs. 5,000 per month
• 25% of your total income (excluding certain types of gains and incomes, and deductions under sections 80C to 80U)
• The actual rent paid minus 10% of your income

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Twinkle Jain's insights into tax-saving through Section 80GG can help many individuals reduce their tax liability. By understanding the eligibility criteria and the amount of deduction available, taxpayers can make informed decisions and optimize their tax savings. Always ensure that you have the necessary documentation and meet the conditions to claim this deduction effectively.