• House rent deduction for work-from-home professional

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
Asked 4 years ago in Income Tax

- You can claim it proportionately.

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

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.

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

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.

 

Ruchi Goel Anchal
CA, Gurgaon
525 Answers
16 Consultations

5.0 on 5.0

- 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.

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

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

Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

Yes, since you are not covered in the list of eligible professionals u/s. 44ADA, you can file u/s. 44AD.

Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

You would be covered under 44AD if you are not getting covered under 44ADA.

We can discuss the same in detail over phone consultation

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

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.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

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.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

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.

 

Poorvi Jain
CA, Indore
143 Answers
1 Consultation

4.8 on 5.0

Hi,

 

Hope you are doing well !!

 

Yes, you can claim it proportionality.

 

 

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Also you can take the benefit of section 80GG subject to certain conditions.

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Correct Proportion for Rent claim is a subjective question. That is why 80GG benefit is based on clear provisions,

Ruchi Goel Anchal
CA, Gurgaon
525 Answers
16 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA