It is seen that often people forget to claim a deduction for earning interest on bank depoist. At the same time , it is also found that they wrongly claim deduction from the interest . Therefore , a simple video explaining the provision of Section 80TTA of Income Tax Act is created to help ordinary tax payers. Please read the FAQ also below the video
Video on Deduction u/s 80TTA
FAQ on Deduction u/s 80TTA on Interest Earned
Is there a deduction against interest earned on in savings account ?
Yes, Section 80TTA allows deduction upto Rs 10,000 on interest earned in a savings account. The provision is given below :
Deduction in respect of interest on deposits in savings account.
80TTA. (1) Where the gross total income of an assessee, being an individual or a Hindu undivided family, includes any income by way of interest on deposits (not being time deposits) in a savings account with—
|(a)||a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);|
|(b)||a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or|
|(c)||a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),|
there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee a deduction as specified hereunder, namely:—
|(i)||in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and|
|(ii)||in any other case, ten thousand rupees.|
(2) Where the income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under this section in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body.
Explanation.—For the purposes of this section, “time deposits” means the deposits repayable on expiry of fixed periods
Can I claim deduction u/s 80TTA for interest on fixed deposit or term deposit ?
No, the deduction u/s 80TTA is not allowed for interest earned in any way other than savings account.
Can interest earned in a savings account with cooperative bank or post office allowed deduction ?
Yes, interest in savings account with cooperative or post office are allowed deduction.
Can AOP or Firm claim deduction u/s 80TTA?
No, only individual or HUF is allowed deduction u/s 80TTA