- You can claim it proportionately.
Hello, I am a self-employed professional not eligible for presumptive taxation. I work from home and pay a rent of Rs 24,000 per month. For FY2020 I earned income of Rs 8.4 lakh and want to claim deductions on the house rent. Is it possible? And to what extent can I claim the amount? Also, if I claim it as a deduction, can I also claim 80GG house rent relief? Many thanks
You must claim it in 80GG rather than going for claiming it as expense against your business income.
Or Once you claim it expense against business income it wont be fair to claim deduction again u/s 80GG.
There is a proportion while claiming such common expense in business profit and loss account.
Why are you not eligible for presumptive taxation as only commission agent are not eligible.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
You can claim only a proportionate amount as rent expense from your business. But if you are claiming 80GG benefit cannot be claimed.
According to me it would be beneficial to claim 80GG benefit.
Thank you all. Some followup Q's for all of you: Naman: I am a freelance writer and policy researcher providing services to various LLPs, non-profits and media outlets (with the qualifications to back it). The fees are all under 194J. But I have heard that the eligibility under 44ADA is not very clear here, so I have so far opted to file ITR-3. But it is getting tedious. Can I file under 44AD? Ruchi: Can you explain how 80GG would be better? It only allows Rs 60,000 benefit per year, whereas even at 33% proportion the deduction comes to at least Rs 80,000. To Ruchi and Vivek: what is the correct proportion for a 8-hour workday?
- You can avail the benefit section u/s 44AD.
- If you avail the benefit u/s 80GG still you need to proportionate the expenses. Rent is divided on the basis of area used for business purpose and personal purpose.
- Please take phone consultation for detail discussion.
Hello,
You can claim proportionate expenses of rent based on the area used for your professional purposes.
The remaining amount of rent can be claimed as a deduction u/s. 80GG, subject to other conditions of Sec. 80GG.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Yes, since you are not covered in the list of eligible professionals u/s. 44ADA, you can file u/s. 44AD.
You would be covered under 44AD if you are not getting covered under 44ADA.
We can discuss the same in detail over phone consultation
Hi,
You can certainly take deduction for rent paid for your home from where you are working. You need to estimate a reasonable portion for the deduction. Generally, for the nature of work mentioned by you, one room in your home would be sufficient.
Thus, depending upon the size of your home, you can take deduction.
You can also take deduction u/s80 GG subject to other conditions of that section.
Further, your decision to opt for normal provisions make sense as for your nature of services, applicability of 44ADA is not clear.
In my view u should go for 80GG benefit rather then claiming expense.
once u take business expense then u can’t claim 80 GG benefit.