Query regarding 80tta - interest on savings bank account

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This query is : Resolved

nba (Querist)

07 January 2013 Hi,

I received a communication from my employer stating that I can claim interest deduction up to Rs. 10,000 on Savings Bank account. It has been also mentioned that it will be treated as "Other Income". I am failed to understand how does deduction help me in saving tax if I have to show it as other income? Isn't my net tax payable remains the same? Please assume salary of Rs. 7,00,000 per year.

Thanks,
nba

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

07 January 2013 There is no other benefit except getting a maximum deduction of Rs 10000/-, which you otherwise can also claim in your return by showing the Savings A/c Interest Income.
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If you make such a declaration, In case Savings Interest is less than Rs 10000/- you will get full deduction, however when Savings Interest exceeds 10000/- then employer has to deduct TDS on such extra income.
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The only benefit which you can get, is you will not be required to pay Tax on Self Assessment at the time of filing the return.
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In case savings interest exceeding 10000/- has been received by you on a single Bank A/c, it will prompt you to check whether the bank has also deducted TDS. Employer can consider such TDS credit.
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