Section 134: deduction for rent paid (when you don't get HRA)

How much can be deducted

The deduction is the least of the following three amounts:

• ₹5,000 per month (₹60,000 a year)
• 25% of the assessee's total income for the tax year
• Actual rent paid, minus 10% of total income

When the deduction is not available

Section 134(4) blocks the deduction in either of these situations:

• The assessee, their spouse or minor child (or, for an HUF, the family) owns residential accommodation at the place where the assessee lives, works, or carries on business or profession.
• The assessee owns residential accommodation at any other place and that property's value would be assessed as a self-occupied or deemed-let-out property under Section 21(6) or (7)(a).
• The assessee already has income that falls under the house-rent-allowance category listed in Schedule III (i.e., someone who does receive HRA cannot also claim this deduction).

Other conditions

The 10%/25% of total income referred to above is computed on income before allowing the Section 134 deduction itself - not after.

The accommodation can be furnished or unfurnished, and the deduction applies regardless of what the payment is called, as long as it is, in substance, rent for the assessee's own residence.

Further conditions relating to the area or location of the accommodation may be prescribed separately.

Frequently asked questions