10 December 2017
Need advice from CA friends. Mr.X had a loss of Y rs in trading.Recd X rs as interest income. Loss declared Y-X & claimed Rs10k rebate under 80TTA. IT has slapped a notice stating it cant b done and added a fine of 10K. What should be his contention?
10 December 2017
Savings account interest can't set off against any other interest or losses. It is simple savings accounts interest deduction max. upto 10K for all Savings accounts.
10 December 2017
The interest earned from SB account is shown as income from other sources. Is this correct? and total loss is calculated after deducting the income from other sources. Rebate of 10000 is claimed as per 80tta.
10 December 2017
Yes it is correct. both income from other sources is separate.If long term loss then you can carry forward to next year. If losses then it can't be shown in income from other sources. you have to take SB interest as income and deduction of 80TTA upto interest amount if interest is less than 10K or max. 10K if interest is more than 10K ..!!!
10 December 2017
Sir still not clear. Here is the exact statement from ITO. My only observation is to claim under 80tta it should be savings bank account in a nationalised bank. There is no section which prohibits one from claiming rebate if these conditions are met. Quote :It is seen from the computation of the income furnished by you for A.Y.2015-16 that you have set off loss from share trading against entire interest income of Rs.1,90,024/- under head of ”income from other sources” and claimed deduction u/s 80TTA of Rs.10,000/- as well. Since, entire interest income is set off, the claim of deduction u/s 80TTA of Rs.10,000/- is wrong and cannot be allowed. Therefore, an addition of Rs.10,000/- is proposed on account of wrong claim of deduction. Please furnish your objection by 11.12.2017, if any. Unquote.
11 December 2017
If you have received saving account interest of Rs. 54000/- then you can claim 10,000 as 80TTA deduction but you have to separate both interest income bcz other than savings account interest is totally taxable. if you shown both interest combined and ITO raised notice for that then you have to prepare revised computation and a letter of correction for ITO and contact them and come here again...!!!
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