Deductions u/s 80TTA

20 Oct 2022

Section 80TTA and TTB


If You kept your Funds in the Saving bank account then this Article is about to give you the Value by saving your Tax…….!!


How…..??


We all kept our funds to some Extent in the Saving Bank Account and you might have heard that Interest from the saving bank account is the part of the other Income and the same shall be taxable under Income Tax.


So what….. I will not declare the same in the ITR


How Income Tax is gonna come to check my Bank account.

Well they aren't required to be because as per the Banking Guidelines Every has the Obligation to file the details of the Interest and other specified transaction on a periodic basis.

Whatever amount of interest you earned is automatically reflected in the Income Tax return.


Deduction under section 80TTA

 

Section 80TTA provides the deduction from the Interest of Saving Bank account to Individual and HUF only.

Eligibility for claiming Deduction under Section 80TTA:

The following entities can claim deductions under section 80TTA

  • Individual Taxpayers

  • HUF

Both entities mentioned above can claim deductions under Section 80TTA provided that they hold savings accounts with the following:

  • Banks

  • Co-operative banks or a co-operative society carrying on the business of banking

  • Post Office


Restriction-

1.)  Deduction under this section is not available for the senior Citizen they are eligible for the deduction 80TTB mentioned below.

2) If the said interest is derived from any deposit from any saving bank account held by or on the behalf of a firm or AOP/ BOI No Deduction shall be available in respect of the such income in computing the total income of any partner of the firm or any member of the AOP or BOI.

3) If You opt for the New Regime under section 115 BAC then this deduction shall not be available.

 

Interest on the NRI account

Interest on the NRE account is already covered under section 10(4) but the Interest on the NRO account shall be covered under the deduction of the section 80TTA.


Quantum of the Deduction

 Actual amount of Interest Earned

                    OR                                      }  Whichever is less.

Rs. 10000


For Example.

If Mr Rajat  Age 42 years earns a salary income of Rs 10,00,000, interest on savings account with a bank is Rs 5,000 and on fixed deposits is Rs 15,000 in a financial year. He is eligible for deduction of Rs 50,000 under Section 80C. Then, taxable income will be computed under the old tax regime as below:-

Conclusion

The Deduction under section 80TTA shall be available only for the Individuals (Other than Senior Citizen) upto maximum amount of Rs. 10000 only if such person is not opt for the New Regime.

 


FAQ

Que- My annual income comes below the minimum annual tax slab, do I need to pay tax on the interest earned on my savings bank account?

Ans- No, Because total annual income is below the basic exemption limit for Taxation hence Not required to pay tax on the interest earned on your savings bank account even if it crosses Rs.10,000.

Que- Can someone claim a Tax deduction for a fixed deposit under Section 80TTA?

Ans. No.

Que. how many bank accounts I can claim a deduction under section 80TTA

Ans. There are No limit on the number of the account you hold but on the Aggregate Income you earned from the Interest. Hence the tax benefit can be claimed for any number of accounts till the aggregate interest amount of Rs 10,000.

Que. Will TDS be deducted on my interest income?

Ans. No TDS.






Rishabh Agarwal