AWS CloudFormation example that allows a security group rule to reference the same security group as the source.

aws-cfn-self-referencing-sg.json

{
  "Description": "Create a VPC with a SG which references itself",
  "AWSTemplateFormatVersion": "2010-09-09",
  "Resources": {
    "vpctester": {
      "Type": "AWS::EC2::VPC",
      "Properties": {
        "CidrBlock": "172.16.0.0/23",
        "EnableDnsSupport": false,
        "EnableDnsHostnames": false,
        "InstanceTenancy": "default",
        "Tags": [ { "Key": "Name", "Value": "vpctester" } ]
      }
    },
    "sgtester": {
      "Type": "AWS::EC2::SecurityGroup",
      "DependsOn": "vpctester",
      "Properties": {
        "GroupDescription": "vpc tester sg",
        "VpcId": { "Ref": "vpctester" }
      }
    },
    "sgtesteringress": {
      "Type": "AWS::EC2::SecurityGroupIngress",
      "DependsOn": "sgtester",
      "Properties": {
        "GroupId": { "Ref": "sgtester" },
        "IpProtocol": "tcp",
        "FromPort": "0",
        "ToPort": "65535",
        "SourceSecurityGroupId": { "Ref": "sgtester" }
      }
    }
  }
}

@SwathiKanduri the groupId relates to the security group for which this AWS::EC2::SecurityGroupIngress resource is actually an ingress rule. The sourceSecurityGroupId relates to the security group which we want to allow inbound traffic from. In this case they both refer to sgtester because this is a self-referencing security group, but in the general case sourceSecurityGroupId would refer to some other security group that we want to allow inbound traffic from.

Thanks, it was helpful

Thanks!