Can a professional avail 80GG rent deduction along with Presumptive Taxation?

Income Tax Income from Business or Profession
1

I need to understand if a professional who has opted for the Presumptive Taxation scheme can also avail deduction under 80GG for rent paid?

Also, which other deductions are still allowed under 44ADA?

Thanks.

2

Hi @ubtax

Section 80GG deduction is applicable to salaried and self-employed professionals. Read more about 80GG - Deduction for Rent Paid - Learn by Quicko
It is eligible even if you have opted for the presumptive scheme of taxation.

When you opt for 44ADA, you report a fixed percentage of gross receipts as income, so you are not allowed to claim expenses. However, they can claim deductions under Chapter VI-A.

Hope this helps.

1 Like
3

Thanks for the info @Shrutika_Shah !

4

Hi,

I went through the links you provided and noticed the rules to arrive at the effective deduction amount;

  1. Total rent paid less 10% of total income
  2. 25% of the total income
  3. INR 5000 per month i.e INR 60,000 annually

For example, if a self-employed person is earning 15,00,000 annually and is paying rent of 10,000 per month, then above rules will work out as;

  1. (12 x 10,000) = 1,20,000 - 1,50,000 (10% of total income) = -30,000
  2. 25% of total income = 3,75,000
  3. (12 x 5,000) = 60,000

Since the minimum amount here (30,000) a negative value, would this person get the 80GG benefit?

Thanks again.

5

Hi @ubtax

The lowest will be ₹0 as negative values are not taken into consideration.

6

@Shrutika_Shah so basically he will not be able to avail the 80GG deduction, correct?