An individual must file Form 10BA to get the deduction for the rent paid for rental property under section 80GG. The section provides relief for individuals who don’t receive a house rent allowance (HRA) from their employers. However, they will still have to pay the rent expenses for their residential accommodation. The Form 10BA of the Income Tax Act helps you decrease your taxable income and tax liability.
Is Form 10BA Mandatory?
The answer is yes if you need clarification about whether Form 10BA is mandatory. It is compulsory to claim a deduction for rent remunerated under Section 80GG of the Income Tax Act. After claiming deductions allowable under Form 10BA, taxpayers can decrease the income subject to taxation. It helps to substantially save tax for those who pay a considerable share of their income as rent. The Form 10BA is mandatory for the following reasons:
- Filing this form ensures taxpayers comply with the Income Tax Act 1961. They can incur interest, penalties, or legal consequences if they don't.
- This form works as documentary evidence to approve your claim for deductions under Section 80GG.
- It offers a certifiable record of your rental payments.
- If there is an income tax audit, the accurate filing of Form 10BA (along with the required documents) can help confirm the acceptability of your deductions. Consequently, it protects you from any confrontational tax assessments.
- It presents legitimate tax compliance records that help those individuals who apply for visas, loans, or background checks.
Form 10BA of the Income Tax Act
Form 10BA of the Income Tax Act is a declaration that individuals must file. It must be filed by those individuals who don’t get a house rent allowance from their employer or are self-employed, are currently paying rent for their residence, and are claiming deductions under Section 80GG. They can submit it online via the income tax department's e-filing portal.
Form 10BA Due Date
Form 10BA of the Income Tax Act should be filed before the income tax return. The due date for Form 10BA is identical to that for income tax returns. For example, for the financial year 2023-24, the due date to file Form 10BA is 31 July 2024. If you are required to audit your books of account, the due date for filing this form will be 30 September 2024.
Form 10BA Applicability
The following points justify the Form 10BA applicability:
- The taxpayer can be salaried or self-employed; however, they should not receive a house rent allowance from an employer.
- If the taxpayer, their minor child, spouse, or the assessee is a member of a HUF (Hindu Undivided Family), then the HUF must not possess any self-occupied residential property.
Form 10BA Limit
The Form 10BA limit for claiming a deduction for the rent paid under Section 80GG is as follows:
The deduction amount is the lowest of the following:
- Rs.5,000 per month or Rs.60,000 per year.
- 25% of the total income (excluding short-term capital gains under Section 111A, long-term capital gains, Income under Section 115A or 115D, and deductions under Sections 80C to 80U.
- Actual rent (-) 10% of income.
Form 10BA for 80GG
Form 10BA for 80GG serves as a declaration that a taxpayer needs to file to claim a deduction for the rent paid for rental property. It is applicable when a taxpayer's employer does not grant a house rent allowance. To claim the deduction, the taxpayer must declare that they are not claiming the deduction for a self-occupied property in another location or the exact location where they are employed. If you fulfil the eligibility criteria and pay the rent, you can claim the deduction under Section 80GG.
How to file Form 10BA on the Income Tax Portal?
Follow these steps to file Form 10BA income tax online:
Step 1: Login on the e-filing portal
Step 2: On the dashboard, click ‘e-File’ > ‘Income tax forms’ > ‘File Income Tax Forms’
Step 3: Scroll down to select Form 10BA. Alternatively, enter Form 10BA in the search box. Click on the ‘File now’ button to proceed.
Step 4: Select the Assessment Year for filing the return. For example, if you are filing taxes for income earned in FY 2023-24, then select AY 2024-25.
Step 5: After checking the documents required for filing the form, click on 'Let's Get Started'.
Step 6: Fill in the required details, click on Preview, then Click on ‘Save’.
Step 7: After reviewing all the information, ‘Proceed’ to E-Verify. You can e-verify either through:
- Aadhaar OTP
- Digital Signature Certificate (DSC)
- Electronic Verification Code (EVC)
Once the OTP is entered, click on ‘continue’ and Form 10 will be filed.
Form 10BA Download
You can visit the official website of the Income Tax Department to download Form 10BA. Here is the PDF format of Form 10BA.