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Deduction u/s 80GG for accommodation away from workplace

QUESTION: I am working in a working site away from my residence in my native place in a different city paying rent for accommodation, where my family is staying. Since I am provided accommodation at the working site, the perquisite value is adopted for such accommodation. Since I am not receiving any HRA, while I am put to the necessity of having double residence, would I be eligible for deduction under Sec. 80GG in these circumstances?

ANSWER: Deduction under Sec. 80GG is available for persons who are not in receipt of house rent allowance, but have to pay rent for their accommodation in excess of 10 per cent of their total income.

The occupation for accommodation should be for his own residence and subject, inter alia, to the condition that he should not own a house at the place, where he ordinarily resides and performs duties of his office or employment.

If the reader has to maintain his personal residence at a different place, though he has been given rent free accommodation at the work site, there is no reason why it should not be eligible for relief. There is no question of double benefit on account of rent free accommodation, because he pays tax on perquisite value.

The declaration in Form 10BA only requires a statement that he does not own any accommodation, where he either works or resides. If this condition is satisfied, the claim should be admissible, subject to other conditions relating to limits as regards minimum rent payable (more than 90 per cent of the total income) and maximum deduction under Sec. 80GG being 25 per cent of total income or Rs. 2,000 per month, whichever is less. Total income for this purpose is total income before deduction under Sec. 80GG.

S. Rajaratnam

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