hi pankaj, As a professional, till last year, i was carrying out my professional activities from my residence and therefore was able to show the house rent as expenses. This year, i have now purchased my office space. can i still show my house rent in expenses. if not, what is the way out?
1 Answers
Now, house rent cannot be shown as business expense. But you can claim benefit for house rent paid under section 80GG.
There are some conditions for this claim:
- It should be occupied by you.
- Your spouse/parents should not be paying rent for this house.
- You or your spouse should not be owning a house in same city.
- You should not be owning house at any other place for which you claim home loan benefit.
Deduction cannot exceed a. Rs 2000 per month, b. rent paid - 10% of total income, and c. 25% of total income.
hi pankaj, thanks for ur valuable advice however, i m not clear on the last part relating to deduction. Are these conditions a, b & c alternative ?? Also what do u mean by total income?? gross or net...
can u pls elloborate with suitable example.. say if gross income is 10L. Thanks !!
a, b and c are not alternatives but minimum of these would be only considered for deduction.
Say, rent paid by you is 1.2L per year and 10% of your gross income is 1L, then (rent paid- 10% of total income = 20,000) can only be deducted for HRA.
But if rent paid by you is 1.5L per year. then rent paid - 10% of income = 50,000. In this case maximum 24,000 can be deducted (2000 per month max)
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