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What is Form 10BA?

5paisa Research Team

Last Updated: 21 Nov, 2023 05:13 PM IST

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Form 10BA assists individuals who don't get HRA (House Rent Allowance) from their respective employees to claim deduction for payment of rent for their residential accommodation. Thus, for people who intend to reduce their taxable income, Form 10BA plays a vital role in reducing their tax burden. Let's look at what is Form 10BA and how the form works, when to fill the form, the benefits of filling out the form, and the procedure to avail tax deductions successfully. 

What is Form 10BA?

So, you may ask what is Form 10BA? Form 10BA of Income Tax Act is a particular form that is used in India for tax purposes and is a declaration that is necessary to be furnished by a taxpayer for claiming a deduction for rent paid when they don't receive HRA from their respective employer. The form is usually used by the taxpayer to declare that the taxpayer meets specific conditions mentioned under Section 80GG of ITA that allow for deduction when HRA is not received. 

Applicability of Form 10 BA With Example

Individuals can fill out Form 10BA and declare that one doesn't receive HRA from their employer or business and they, as well as their spouse or minor child, don't own a residential property in the same city. The application process can be typically done online by visiting the official site of the Income Tax Department's e-filing section.

For instance, Mr. Aggarwal is a self-employed individual running a small business in Mumbai and doesn't receive HRA from his business. He pays rent for accommodation in the city as he doesn't have any residential property in the city. Let's assume that his total income is Rs. 6,00,000 per annum, and he pays Rs. 12,000 for rent every month. Therefore, he is paying Rs. 1,44,000 rent every year. But the maximum deduction allowed under Section 80 GG is Rs 60,000; he can claim deduction of Rs 60,000 by filing Form 10 BA of Income Tax Act.
 

When To File Form 10BA?

Form 10BA must be filed along with filing one's income tax return for the relevant assessment year. One must ensure that it is filed before the due date to receive the claim deduction successfully. While filing, one must keep handy all the required documents that are to be attached to the form.

How To File Form 10BA Online?

To file Form 10BA online, it is essential to follow the steps mentioned below:

  • Log in to the e-filing portal and log in to the respective account.
  • Select the appropriate ITR form and fill in the form carefully.
  • Attach all the required supporting documents with the form mentioned in specific sections.
  • Please verify all the details and see whether they are filled correctly.
  • Sign the form and submit it. 
  • Keep records for future reference. 
     

Benefits of Form 10BA

Filling out Form 10BA, which serves as a declaration of the eligibility for tax deduction, offers various benefits, which are mentioned below:

  • Deduction for the rent paid for residential accommodation in the city one works.
  • Reduction in the overall tax liability.
  • Beneficial for renters without House Rent Allowance and low-income individuals.
  • Serves as a financial relief for self-employed individuals.
     

Documents Required For Filling Form 10BA Online

To file Form 10 BA of Income Tax Act online successfully, one must ensure that the required documents are kept handy, which includes the following:

  • Receipts of rent and rental agreement.
  • The Permanent Account Number (PAN) and the taxpayer’s name.
  • Declaration that the person doesn't own any residential property in the city.
     

Amount Eligible for Claiming Deduction Under Section 80GG

As per the Form 10BA meaning, maximum amount eligible for deduction for rent paid under Section 80 GG of ITA is Rs. 60,000 per annum. Therefore, one is eligible for a deduction of Rs. 5,000 per month.

Things to Remember About Form 10BA

If one intends to apply for deduction and fill out Form 10BA, it is essential to take a few things into consideration, which are listed below:

  • The rent must not exceed 25% of the sum total of the entire income but above 10% of the entire income.
  • The maximum amount eligible for deduction is Rs. 5,000 every month, that is Rs. 60,000 per annum.
  • For claiming the deductions, the person must file Form 10BA with all the required supporting documents.
  • The taxpayer or the spouse or minor child must not own any residential property in the particular town or city, where the individual's workplace is located.
  • Make sure that you keep all the records after filing Form 10BA. This will assist in future references and to avoid future confusion.
     

Conclusion

Therefore, it doesn't need to be mentioned that Form 10 BA of Income Tax Act offers a valuable tool for Indian taxpayers looking forward to reducing their tax burden for rent paid for any residential accommodation. The form thus extends financial relief to those individuals who don't receive House Rent Allowance. 

It proves extremely beneficial for self-employed taxpayers and low-income individuals. Form 10 BA of Income Tax Act also plays a vital role in the promotion of rental housing and supporting compliance with the regulations concerning tax, thereby contributing to a more equitable tax system.
 

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Frequently Asked Questions

Yes, filing form 10 BA is mandatory for those people who intend to claim deduction for the payment of rent under section 80GG of ITA (Income Tax Act). Therefore, it is not a compulsion for all the taxpayers. Some key points that need to be considered before filing the form are going through the eligibility criteria thoroughly to make sure that one is eligible for the deduction claim. 

Deduction claims on U S 80GG require an individual to meet certain conditions or eligibility criteria and follow a particular procedure. To claim deductions concerning House Rent Allowance (HRA), it is essential for an individual to ensure that the eligibility criteria are met, such as not being the owner of a residential property in the city where one works or lives and not being the receiver of HRA. 

The next step concerns the maintenance of proper records that can be provided as proof against the payment of rent. Fill out Form 10 BA, declaring that all the eligibility criteria are successfully met, which will assist in scrutiny by the tax authorities. File your Income Tax Return and verify all the details of the deduction. 
 

No, filing of Form 10 AB is not required every year. Upon registration, it is valid for five years. In case a trust intends to apply for renewal, it can be done by applying at least five months before the date of expiry of the five-year tenure. 

Yes, the form may be filed after the due date, but in that case, claim deduction will be denied to the concerned individual. To claim deduction, it is essential to fill out the form within the due date

No, both 80GG and 24b cannot be claimed simultaneously. This means that if the assessee is the owner of a property, whether it's self-owned or rented, and claims sec 24B, s/he is not eligible to claim deduction under section 80GG. 

No, both 80GG and 10 13a deductions can't be claimed together at the same time. The assessee is only eligible to claim deduction under any one of the sections mentioned above concerning the rent payment deduction. 

Yes, one is eligible to claim deduction on the payment made towards rent even if the salary contains HRA. This is because HRA is a common part of the salary packages offered by employers. 
However, there are several conditions concerning the deduction, such as the actual amount of rent paid, the location of the rented property as well as the HRA one has received. One can provide the necessary details along with the required documents at the time of ITR filing to claim the deduction.
 

Yes, one is eligible to claim deduction under section 80GG and also fill the Form 10 BA for the paid rent being a freelancer. But you need to ensure that both you and your spouse(if any) don't own a residential property in the same city. Go through the eligibility criteria for rent deduction carefully before filling out the declaration form. 

If Form 10BA is not filed within the due date, the claim deduction for the payment of rent may be rejected. 

People who already own a residential property, whether self-owned or rented in the same city where they work or run their business, can't claim deduction for rent paid under Section 80GG of ITA. Also, their spouse and minor child can't claim the deduction.

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