The Income Tax Act, 1961, allows assesses to claim various deductions from their income. The deductions help individuals to reduce their income tax liability.
Chapter VI A of the Income-tax act contains all deductions such as 80C, 80D, 80G, etc. One of the deductions among them is 80TTA.
Section 80TTA deduction is linked with your saving bank interest. When you save your money in the bank, then the bank credits some interest income in your bank account. Do you give tax on interest income also?
Let’s understand how much income tax you pay in your saving bank interest income.
Section 80TTA of the Income-tax Act, 1961 provides a deduction on interest income on your saving accounts. You may have a saving account in the bank, post office, or cooperative society.
To claim the deduction, firstly, you have to add interest income under the head of “Income from other sources.” After that, you can take the benefit of the deduction.
The eligible persons can claim deduction under section 80TTA in a financial year shall be the lower of:
Note: If a person has multiple bank accounts, then you need to total all the interest received in all bank accounts. And, the maximum limit will remain INR 10000.
The 80TTA deduction shall be available only to:
Note: Super senior citizens are covered under section 80TTB.
As per the section, the interest income earned on saving accounts held in the following organizations are eligible for deduction:
If you are earning interest income from the following deposits, then it shall not be allowed for the exemption,
Deduction under section 80TTA provides relief to middle-class individuals. Therefore,it helps them to reduce the tax liability. However, check out the type of interest incomes allowed for the deduction before claiming 80TTA.