Respected sir, which interest is deducted under section 80TTA ? Is the interest earned on saving bank a/c? OR interest credited to saving a/c which is earned on fixed deposit a/c (quarterly) OR both interest ?? Plz reply ..
For giving additional income tax deduction on Interest on Saving Bank Account new section 80TTA under Income Tax Act,1961 was introduced through Finance Act, 2012. This additional deduction u/s 80TTA is applicable only to individual and HUF on interest income from bank saving account .i.e this deduction is not applicable on interest received on time deposit/term deposit.
Eligible Assessee for section 80TTA: only Individual and HUF are elegible under this section, so a firm, an association of persons or a body of individuals will not get the benefit of this section.
Deduction Limit/ Maximum Deduction under Section 80TTA: Rs 10,000/- or actual interest receipt from saving bank account , which ever is lower. Example1. if person receive interest of Rs 15000/- from saving bank account then he has to pay tax on Rs 5000/- and Rs 10,000/- he can claim as deduction u/s 80TTA. Example2. if person receive interest of Rs 9000/- from saving bank account then he don’t have to pay tax on Rs 9000/- and Rs 9,000/- can be claimed as deduction u/s 80TTA.