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Section 80TTA -Deduction for Interest on Saving Accounts

Section 80TTA of the Income Tax Act


Section 80TTA of the Income Tax Act provides a deduction on interest earned from savings accounts.

This deduction is separate from other deductions available under sections 80C, 80CCD, and 80D of the Income Tax Act. Taxpayers can claim this deduction in addition to other applicable deductions based on their eligibility.

What is section 80TTA?

Section 80TTA of the Income Tax Act 1961 provides a deduction on the interest earned on your savings account (with any bank, cooperative society, or post office) up to Rs.10,000.

No deduction for fixed deposits interest is available u/s 80TTA. This deduction is allowed to all individuals and HUFs other than senior citizens (those aged 60 or above). Senior citizens have a separate deduction under Section 80TTB.

Applicability of Section 80TTA

Deduction U/s 80TTA is available to Individuals and HUFs. It is not applicable to other types of entities, such as companies or partnerships.

Non-Applicability

This deduction is not available for senior citizens (those aged 60 or above) also. As they are eligible for a separate deduction under Section 80TTB.

Eligible Income and Accounts for 80TTA

This deduction is applicable to interest earned on savings accounts held with banks, cooperative societies, and post offices.

Non-eligible Income and accounts

The deduction under Section 80TTA does not apply to interest earned from:

  • Fixed deposits,
  • Recurring deposits, or
  • other term deposits.
  • Thus, it specifically covers interest earned from savings accounts only.

Deduction Limit under section 80TTA

The maximum deduction limit prescribed under section 80TTA is Rs.10,000. Therefore, taxpayers can claim a deduction for interest earned on savings accounts up to a maximum of Rs. 10,000 in a financial year.

Frequently asked questions (FAQs) regarding Section 80TTA

Here are some frequently asked questions (FAQs) regarding Section 80TTA of the Indian Income Tax Act:

1. Is deduction u/s 80TTA applicable for the current financial year?

Yes, it is applicable for the current financial year 2022-2023 (AY 2023-24).

2. Who can claim a deduction under Section 80TTA?

Individuals and HUFs

3. What was the deduction limit under Section 80TTA?

The deduction limit is a maximum of Rs. 10,000 per financial year on interest earned from savings accounts.

4. Can I claim a deduction u/s 80TTA on interest earned from fixed deposits?

Interest earned from fixed deposits, recurring deposits or other term deposits doesn’t qualify for the deduction.

5. Can 80TTA be claimed by NRI?

Yes, Section 80TTA can be claimed by NRI’s.

6. Can Senior citizens claim deduction u/s 80TTA?

No. Senior citizens are not eligible for 80TTA. There is a separate Section 80TTB, under which they can claim a deduction for interest on saving bank accounts and term deposits up to Rs.50,000.

Disclaimer: As Income tax laws are subject to change, it’s advisable to consult a qualified tax professional or CAs for the latest income tax rules and guidelines.

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