The Income Tax Appellate Tribunal ( ITAT ) in Bangalore has ruled that submission of Income Tax Form No. 10BA is mandatory for claiming deductions under Section 80GG of the Income Tax Act, 1961. However, the assessee failed to comply with this requirement. As a result, the ITAT directed the Assessing Officer (AO) to allow the deduction once the form is filed.
In this case, the assessee claimed a deduction of Rs. 60,000 under Section 80GG of the Income Tax Act, which was denied by the AO. The AO argued that the deduction under Section 80GG is only available to individuals and not to Hindu Undivided Families (HUFs). Therefore, the basic condition for granting the deduction under Section 80GG was not fulfilled by the assessee, a decision upheld by the NFAC.
Section 80GG allows individuals to claim deductions for rent paid for their accommodation if they do not own property in the same city. However, individuals receiving a Home Rent Allowance (HRA) from their employer are ineligible for this deduction.
The requirement of filing Form 10BA is crucial for claiming benefits under Section 80GG. This form serves as a declaration that the taxpayer has rented a house during the relevant period and has no other residence. Failure to submit Form 10BA renders the taxpayer ineligible for the deduction under Section 80GG.
The bench, consisting of George George K (Vice President) and Chandra Poojari (Accountant Member), emphasized the necessity of filing Form No. 10BA to claim the deduction under Section 80GG. Consequently, 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. As a result, the appeal of the assessee was allowed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
