- Only individual and HUF are allowed exemption under this section.
- Only rent paid for purpose of residence of asseessee himself is considered under this section.
- If individual is a salaried employee and receives House Rent Allowance (HRA) at any time during the previous year, he is not eligible for deduction.
- The individual, his spouse or minor child (including step or adopted child) or HUF of which he is a member must not own a residential accommodation at a place where he ordinarily resides or performs duties of his office or employment or carries on his business or profession.
- Also if the assessee (only assessee not any other person mentioned above) owns a residential accommodation at any other place but claims it as a self occupied property under head House Property, exemption is not available under this section.
- Declaration under form 10BA is required to be filed.
Calculation of deduction:-
The amount deductible is least of the following:-
- Rs. 2000 per month (Rs. 5,000 per month from financial year 2016-17)
- 25% of total income
- Rent paid – 10% of total income
Total income excludes long term capital gain, short term capital gain under section 111A and income referred to in section 115A or 115D. But deductions under section 80C to 80U (except section 80GG itself) are deducted for calculating such total income.
