Many taxpayers believe that only employees who receive House Rent Allowance (HRA) can claim tax benefits on rent. However, that’s not entirely true.
Even if your salary does not include HRA, you may still be able to claim a tax deduction on the rent you pay.
The Income Tax Act provides this benefit under Section 134, helping eligible taxpayers reduce their tax burden.
If you’re paying rent and planning to file your Income Tax Return (ITR), here’s what you need to know.
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What Is Section 134 and Who Can Claim It?
Section 134 of the Income Tax Act, 2025 (earlier known as Section 80GG) allows taxpayers to claim a deduction for rent paid on residential accommodation.
This benefit is available to both salaried and self-employed individuals, but only if certain conditions are met.
You can claim this deduction if:
You did not receive HRA from your employer during the financial year.
You are paying rent for the house you live in.
You, your spouse, minor child, or HUF do not own a residential property in the city where you normally live or work.
You submit the required declaration form while filing your tax return.
How Much Tax Deduction Can You Get?
The deduction under Section 134 is not a fixed amount.
You can claim the lowest of the following three values:
Rent paid minus 10% of your total income.
₹5,000 per month (₹60,000 per year).
25% of your total income.
The tax department will allow whichever amount is the lowest among these three calculations.
Important Documents You Must Keep Ready
To avoid any problems while filing your ITR, make sure you maintain proper records related to your rent payments.
These documents include:
Rent receipts
Valid rental agreement
Proof of payment such as bank transfers, UPI transactions, or other traceable payment methods
If your annual rent exceeds ₹1 lakh, you must also provide your landlord’s PAN number.
Keeping these documents ready can help you respond easily if the tax department seeks verification.
Form 10BA Is Mandatory
One of the most important requirements for claiming this deduction is filing Form 10BA.
Tax experts say that taxpayers cannot claim the deduction without submitting this declaration form.
The deduction amount should be reported under the relevant section of Chapter VI-A while filing the Income Tax Return.
Failure to submit Form 10BA or making a claim without supporting documents may attract scrutiny from the tax department.
Available Only Under the Old Tax Regime
Before claiming this benefit, remember that Section 134 deductions are available only to taxpayers who opt for the Old Tax Regime.
If you are unsure which tax regime is better for you, it may be worth comparing your tax liability under both systems before filing your return.
Things to Do Before the Financial Year Ends
Tax experts advise taxpayers to review their eligibility before the end of the financial year.
You should:
Ensure your rental agreement is properly executed.
Make rent payments through traceable methods.
Preserve rent receipts and payment records.
Verify that you meet all eligibility conditions.
File Form 10BA on time.
Taking these steps in advance can make the tax filing process much smoother and help you avoid last-minute issues.
Final Takeaway
If you are paying rent but do not receive HRA, don’t assume you have missed out on tax benefits.
Section 134 can still help you reduce your taxable income, provided you meet the required conditions.
Before filing your ITR, check your eligibility, submit Form 10BA, and keep all rent-related documents ready.
A little preparation can help you claim the deduction smoothly and avoid complications later.