Section 80TTA: Deduction for interest earned on Savings Account
Under section 80TTA income tax deduction for interest earned on savings accounts is allowed. For this purpose, the savings accounts should be opened with Post Offices, banks and cooperative societies only. The benefit of section 80TTA is not available on interest earned from fixed deposits. It is also not available to senior citizens as they get the extended income tax benefit under section 80TTB.
Who can claim deduction u/s 80TTA?
Deduction under section 80TTA is not available to companies, firms or associations. It is only available to
Individuals and
HUF
Tax Benefit:
The tax benefit is only allowed upto Rs 10,000. Any interest in excess of Rs 10,000 shall be chargeable to income tax.
Eligibility:
Only the interest earned on savings a/c opened with the following entities are eligible for deduction under section 80TTA:
Bank
Post Office
Co-operative Societies
Important Note:
Some important points to be considered in respect of section 80TTA are:
Deduction u/s 80 TTA shall not be available to Senior Citizens.
No Deduction shall be allowed for interest on Fixed Deposits
The interest earned on savings account with NBFC’s shall not be covered under this section
This deduction is over and above the limit of Rs 1.5lakh deduction u/s 80C
