house rent under permissible expenses

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?

asked Sep 28 '11 at 00:42 by champ 1122

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:

  1. It should be occupied by you.
  2. Your spouse/parents should not be paying rent for this house.
  3. You or your spouse should not be owning a house in same city.
  4. 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.

answered Sep 28 '11 at 13:57 by Pankaj Batra 5.2k320

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 !!
(Oct 03 '11 at 18:26) champ
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)
(Oct 04 '11 at 00:34) Pankaj Batra

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Asked: Sep 28 '11 at 00:42

Seen: 2,558 times

Last updated: Oct 04 '11 at 00:34