The interest rates on savings bank accounts in India vary from bank to bank and are subject to change from time to time.
Section 80TTA of the Income Tax Act, 1961 provides a deduction on the interest income earned by an individual or Hindu Undivided Family (HUF) from a savings account with a bank, co-operative society or post office up to a maximum of Rs. 10,000 per financial year.
The interest rates on savings bank accounts in India vary from bank to bank and are subject to change from time to time.
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Who is eligible for deduction under section 80TTA?
The deduction under Section 80TTA is available only to individuals and HUFs and not to any other entity like companies, firms, or trusts.
The deduction is applicable only on the interest earned on a savings account and not on any other type of interest income such as fixed deposits or recurring deposits.
How much deduction is allowed under 80TTA?
The maximum deduction that can be claimed under this section is Rs. 10,000 per financial year, regardless of the amount of interest earned.
If the interest earned is less than Rs. 10,000, then the actual interest earned will be considered as the deduction amount.
How to claim deduction under 80TTA?
The deduction under this section can be claimed while filing the income tax return.
The interest income from the savings account should be reported under the head ‘Income from other sources’ in the income tax return.
The deduction under Section 80TTA is not available for senior citizens who are eligible for a separate deduction under Section 80TTB for interest income earned on deposits with banks, post offices, or co-operative societies.
