Paying rent but not receiving HRA? Here’s how you can claim tax relief

Section 134 allows individuals who do not receive HRA as part of their salary to claim a deduction for rent paid towards residential accommodation.

June 12, 2026 22:17 IST

Many taxpayers feel that rent-related tax benefits are available only to those who receive House Rent Allowance (HRA) from their employer. However, even if you do not get HRA as part of your salary, the Income Tax Act allows you to claim a deduction for rent paid, subject to certain conditions. 

Here’s how Section 134 works, who can claim the benefit, and the documents you need to keep ready while filing your ITR. 

Taxpayers who do not receive HRA can claim a deduction for rent paid under Section 134 of the Income Tax Act, 2025 (earlier Section 80GG of the Income Tax Act, 1961). The deduction is available to both salaried and self-employed individuals, subject to certain eligibility conditions.

To claim the benefit, the taxpayer should not have received HRA from an employer during the financial year. In addition, the taxpayer, spouse, minor child, or HUF of which the taxpayer is a member should not own a residential property in the city where they ordinarily live or work.

The claim must be supported by the prescribed declaration in Form 31 of the Income Tax Rules, 2026 (earlier Form 10BA). Failure to file the form or making a claim that is not backed by proper documentation may invite scrutiny from the tax department.

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What is Section 134?

Section 134 allows individuals who do not receive HRA as part of their salary to claim a deduction for rent paid towards residential accommodation.

The deduction is available to salaried individuals as well as self-employed taxpayers, provided they satisfy the prescribed conditions.

You may claim a deduction under Section 134 if:

You do not receive HRA from your employer during the financial year.

You pay rent for a residential property occupied by you.

You, your spouse, minor child, or the Hindu Undivided Family (HUF) of which you are a member, do not own a residential property at the place where you ordinarily reside or work.

You file the prescribed declaration in Form 10BA.

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How much deduction can you claim?

The deduction available under Section 134 is the least of the following:

1. Rent paid minus 10% of total income.
2. Rs 5,000 per month (Rs 60,000 annually).
3. 25% of total income.

The lowest of these three amounts is allowed as a deduction.

What documents should taxpayers maintain to support their rent deduction claim?

Taxpayers should maintain rent receipts, a valid rental agreement, and proof of rent payments such as bank transfers. In cases where annual rent exceeds Rs 1lakh, quoting the landlord’s PAN is mandatory.

How should taxpayers report this deduction while filing their ITR?

Deepashree Shetty, Partner, Global Mobility Services, Tax & Regulatory Advisory at BDO India says, for FY 2025-26, the eligible deduction amount should be mentioned u/s 80GG under Chapter VI-A deduction in the relevant section of Form ITR. 

The deduction is available only if the taxpayer is opting for the Old Tax Regime and filing of Form 10BA is a prerequisite for claiming such deduction.

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What tax-planning steps should taxpayers take before a financial year ends to maximize this benefit?

Formalise the rental agreement during the year and keep traceable payment modes. Maintaining appropriate documentation is key to claiming such a deduction.

“Taxpayers who plan to claim a deduction under Section 134 should review their eligibility before the financial year ends. The benefit is available only if they do not receive HRA from their employer and satisfy the prescribed conditions,” said Deepashree Shetty. 

It is important to maintain proper records of rent payments, including rent receipts, rental agreements, and proof of payment through bank transfers, UPI, or other traceable modes.

Taxpayers should also ensure that they file Form 10BA, which is mandatory for claiming the deduction under Section 134.

Since the deduction is available only under the old tax regime, taxpayers should compare their tax liability under both regimes and also should also verify that they, their spouse, minor child, or HUF do not own a residential property in the city where they ordinarily reside or work. 

Wrapping up

If you are paying rent and meet the eligibility conditions, Section 134 can provide valuable tax relief under the old tax regime only. Before filing your ITR, review your eligibility, submit Form 10BA, and ensure that all supporting documents are in place to avoid any issues during tax assessment.

Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.    

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This article was first uploaded on June twelve, twenty twenty-six, at seventeen minutes past ten in the night.

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