Amendment of section 80GG.
38. In section 80GG of the Income-tax Act, for the words “two thousand rupees”, the words “five thousand rupees” shall be substituted with effect from the 1st day of April, 2017.
Notes on Clauses:
Clause 38 of the Bill seeks to amend section 80GG of the Income-tax Act relating to deductions in respect of rents paid.
The aforesaid section provides that deduction is allowable on the expenditure incurred by an assessee in excess of ten per cent. of his total income towards payment of rent upto a maximum of two thousand rupees per month or twenty-five per cent. of his total income for the year, whichever is less, and subject to such other conditions or limitations as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations.
It is proposed to increase the maximum amount of deduction allowable under the said section to five thousand rupees per month.
This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to assessment year 2017-2018 and subsequent years.
