Interest on savings account

Income chargeable under this head shall be computed as per the method of accounting followed by assesses. There are two methods of accounting namely

• Cash basis :  the income is recognized only on its actual receipt and expenses are recognized only on its actual payment
• Mercantile basis: the income is recognized even before its actual receipt and expense is recognized even before its actual payment

1) Income from Interest on saving bank a/c should be included in the head of "income from other sources'' as per accounting method followed as said by Vishal Goel.

2) We hv to first add interest on saving bank account in  ''income from other sources" as income chargeable to tax and then from total income calculated deduction is available u/s 80TTA.

But do not forget if u have interest from post office saving account exemption is available u/s 10(15)- in case of individual Rs.3500 and in case of joint accounts Rs.7000.