ITAT Bangalore: IT Section 80GG Deduction Requires Filing of Form No. 10BA

The submission of Income Tax Form No. 10BA is compulsory for claiming deductions under Section 80GG of the Income Tax Act, 1961, the ITAT in Bangalore held. The taxpayer is unable to comply with this need. Consequently, the ITAT (Income Tax Appellate Tribunal) asked the Assessing Officer (AO) to allow the deduction once the form is filed.

Under Section 80GG of the Income Tax Act, the taxpayer claimed a deduction of Rs. 60,000, which was refused by the AO. The AO contended that the deduction under Section 80GG is only available to individuals and not to Hindu Undivided Families (HUFs). Thus, the taxpayer does not complete the condition for granting the deduction under Section 80GG, a decision kept by the NFAC.

Section 80GG permits individuals to claim deductions for rent paid for their accommodation if they do not own property in the same city. The individuals obtaining a Home Rent Allowance (HRA) from their employer are not qualified for such a deduction.

The need to file Form 10BA is important for claiming benefits under section 80GG. This form acts as a declaration that the assessee has rented a house in the pertinent period and has no other residence. The taxpayer is ineligible for the deduction under Section 80GG, if unable to submit Form 10BA.

The bench, George George K (Vice President) and Chandra Poojari (Accountant Member), shows the condition of filing Form No. 10BA to claim the deduction under Section 80GG.

The issue was referred back to the AO to grant the deduction after considering Form No. 10BA in conjunction with Rule 11B of the Income Tax Act Rules, 1963. Consequently, the assessee’s petition was authorized.