80TTA/80TTB Calculator
Sections 80TTA and 80TTB guarantee a substantial tax deduction on the interest incomes earned or received on savings accounts or fixed deposits. It requires the taxpayer to expose the interest income adequately in ITR to access the remedy and rightfully assert it during the assessment.
Documentation and appropriate filing of relevant claims and reporting are required to file and claim relevant claims and submit them on time. The ones most benefiting from these sections are the taxpayers, more especially the senior citizens.
Please fill all the mandatory filed to Calculate
What are Sections 80TTA and 80TTB?
Income Tax Act allows individual taxpayers to avail of the Tax Deduction in two sections on their interest income.
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Section 80TTA: Section 80TTA is specifically for individuals and Hindu Undivided Families, it allows them to get deductions within the designated range of interest income from savings accounts opened in banks, cooperative societies, or post offices.
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Section 80TTB: In contrast, Section 80TTB is only under eligibility or designed for senior citizens in that deductions are available within a certain limit of the interest income from deposits with the bank, cooperative society, or post office.
Eligibility Criteria for 80TTA and 80TTB
The eligibility for sections 80 TTA and 80TTB is as follows:
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Section 80TTA allows deductions on income from the interest between individuals and HUFs.
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The maximum limit is usually ₹10,000 in a financial year.
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On the other hand, in the case of section 80TTB, only a senior citizen above 60 years can avail of this opportunity.
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They can claim deductions of ₹50,000 up to their income through interest per annum.
Comparison between 80TTA and 80TTB
Sr. No. | Feature | Section 80TTA | Section 80TTB |
|---|---|---|---|
1 | Source of Income | Interest from Savings Bank Accounts | Interest from Deposits (Fixed, Recurring, etc.), Post Office Savings Accounts, and other specified sources |
2 | Deduction Limit | ₹10,000 per financial year | ₹50,000 per financial year for senior citizens (age 60 and above) |
3 | Eligibility | Available to all individuals | Available only to senior citizens |
Documents required to avail of this deduction
These are the documents needed to avail of the deduction under 80 TTA and 80 TTB
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Interest Certificate from the bank or financial institution
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Proof of age (for 80TTB deduction)
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Form 26AS (Tax Credit Statement)
How to Use 80TTA/80TTB Calculator?
Using the 80TTA/80TTB Calculator is straightforward and can help you calculate your tax deductions effectively. Here's a simple guide to assist you in utilizing TaxBuddy’s calculator effectively:
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Enter details such as financial year, status whether Individual/HUF below or above 60 years of age, amount of savings bank interest, and the amount of deposit interest. Click on the ‘Calculate’ button.
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The eligible deduction amount under Section 80TTA/80TTB will be reflected on the screen.
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Access the Calculator:
Navigate to https://www.taxbuddy.com/ > Resources > Calculators > Select 80TTA/80TTB Calculator.
Example: Computing 80TTA Deductions for Ms. Gupta:
In the F.Y. 2023-2024, Ms. Gupta earns a salary of Rs. 6,00,000 and receives Rs. 8,000 as an interest on the savings bank account and Rs. 20,000 as an interest on fixed deposit. Further, she invests Rs. 15,000 in a tax-savings mutual fund eligible for deduction under Section 80C.
Following table shows the calculation of her taxable income:
Sr. No. | Particulars | Amount (Rs) |
|---|---|---|
1 | Income from Salary | 6,00,000 |
Less: Standard Deduction | (50,000) | |
Net Salary Income | 5,50,000 | |
2 | Income from Other Sources | |
Interest on Savings Account | 8,000 | |
Interest on Fixed Deposits | 20,000 | |
Total Income from Other Sources | 28,000 | |
Gross Total Income | 5,78,000 | |
3 | Less: Chapter VI-A Deduction | |
Section 80C | (15,000) | |
Section 80TTA | (8,000) | |
Total Deductions | (23,000) | |
Net Taxable Income | 5,55,000 |
Benefits of Using the 80TTA/80TTB Calculator
The 80TTA/80TTB Calculator is an essential tool for tax planning: These are several benefits of the 80 TTA/80TTB calculator.
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Accuracy – It becomes easy to compute the possible tax deductions without errors by simply keying in the financial aspects.
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Time-saving – Also within your reach is an innovative way to calculate the estimated tax deductions, saving you time in which one can be useful in other things.
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Financial planning – access to the tool means that one can plan their money better with the actual calculation of the possible tax benefits.
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Cost Friendly – Finally, one can avoid the payments of a tax financial consultant or money to buy software that, in the end, is more expensive to maintain than when using a simple click-away program.
Frequently asked questions
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What is the maximum deduction limit under 80TTA and 80TTB?
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The maximum deduction limit of 80TTA is ₹10,000 for all individuals. Also, The appropriate limit for 80TTB deduction maximum is ₹50,000 for citizens of 60 years and above.
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Can NRI claim deductions under 80TTA or 80TTB?
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NRI can also claim the 80TTA and 80TTB deductions from their interest income from Indian sources.
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Can I use an online calculator to calculate gratuity?
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Yes, you can use an online calculator to calculate gratuity. These tools estimate the gratuity amount based on your last drawn salary and the tenure of service.
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How do I calculate interest income for 80TTA/80TTB deductions?
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Interest earned from savings accounts with any bank, with a cooperative society, and post offices for 80TTA/80TTB must be calculated according to the interest certificate given by these institutions.
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Are fixed deposits covered under 80TTA?
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No, interest income from fixed deposits is not qualified for claim under 80TTA. However, it falls under 80TTB, considering the deduction available to senior citizens
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What documents do I need to claim 80TTA/80TTB deductions?
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An interest certificate from the bank or financial institution, proof of age (for 80TTB), and Form 26AS are typically required.
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Can I claim an 80TTA deduction for interest from multiple banks?
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Yes, interest income received from several savings bank accounts maintained at different banks or other institutions may be clubbed while calculating the 80TTA deduction. But this is up to the overall limit on the sum value.
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How does 80TTB benefit senior citizens differently than 80TTA?
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80TTB has a deduction limit of ₹50,000, which can save interest earned on fixed deposits and other investments in addition to the savings account.
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Is there a difference in the deduction amount for joint accounts?
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No, the deduction amount does not differ between a single or a joint account. The account is counted jointly for income tax benefits.
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Can I use the 80TTA/80TTB Calculator for previous financial years?
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The calculator is meant for application to the current financial year. Therefore, before using it for years beyond the current year, consult a tax professional or refer to the law for guidance.
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What happens if I input incorrect information in the 80TTA/80TTB Calculator?
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Using the correct information input can lead to accurate calculations. Therefore, ensure you evaluate the expenses and interest for reliable tax planning.