Section 80TTA is introduced with effect from April 01, 2013 and will apply from AY 2013-14 and onwards. Section 80TTA is introduced to provide deduction to an individual or a Hindu undivided family in respect of interest received on deposits (not being time deposits) in a savings account held with banks, cooperative banks and post office. The deduction is restricted to Rs 10,000 or actual interest whichever is lower.
It is also provided that where the income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under section 80TTA in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body. Section 80TTB: Rs. 50000 deduction on interest income to senior citizen
Analysis of Section 80TTA
Page Contents
- Who can claim deduction under section 80TTA?
- Eligible savings account for claiming deduction under section 80TTA
- Section 80TTA deduction not available on FD Interest
- Maximum Deduction under section 80TTA
- TDS Provisions not applicable on Saving Bank Interest
- Post office savings bank interest exemption under section 10(15)(i)
- Extract of Section 80TTA
Who can claim deduction under section 80TTA?
Deduction u/s 80TTA is applicable to individual taxpayers and HUF only. This benefit is not available to a firm, an Association of Persons, a Body of Individuals, LLP or Company Assessee.
Eligible savings account for claiming deduction under section 80TTA
Saving accounts with any of following entities will qualify:
- Bank or banking company;
- Co-operative society engaged in carrying on the banking business and as specified.
- Post office savings account.
Section 80TTA deduction not available on FD Interest
This deduction is NOT applicable to the interest you received on your FDs/time deposit or term deposit. Term deposit means a deposit received by the bank for a fixed period and can be withdrawn only after the expiry of the predefined fixed period.27 tips to save Income Tax in India for salaried & business person
Maximum Deduction under section 80TTA
- The deduction allowed is interest received on eligible saving accounts or Rs. 10,000 whichever is lower.
- If interest earned is more than 10,000 then balance amount will be taxable as before i.e considered as Income from Sources and taxed as per your slab rate.
- The deduction is in addition to deduction of Rs. 1.50 Lakh of section 80C of the Income Tax Act-1961.
Applicable from A.Y. 2013-14 Onwards
The section is applicable from April 01, 2012 and will apply from AY 2013-14 and onwards.
TDS Provisions not applicable on Saving Bank Interest
The interest earned on savings account is exempted from TDS under Section 194A of Income Tax Act i.e No TDS is deducted on interest from saving account.
Post office savings bank interest exemption under section 10(15)(i)
Post office savings bank interest is exempt up to Rs. 3500 (in an individual account) and Rs. 7000 (in a joint account) under section 10(15)(i) by virtue of Notification No. 32/2011, dated June 3rd 2011 read with Notification No. GSR 607, dated June 9, 1989. The cumulative impact of section 10(15)(i) and 80TTA as follows:
| Up to the Asessment year 2011-12 Rs. | For the Assessment year 2012-13 Rs. | From the Assessment Year 2013-14 Rs. | |
| Interest on Post Office saving Bank (exemption under section 10(15)(i) | Full Exemption, nothing is taxable | Exemption up to Rs. 3500 in a single account and Rs. 7000 in a joint account | Exemption up to Rs. 3500 in a single account and Rs. 7000 in a joint account |
| Interest on savings account with a bank, co-operative bank and Post office (deduction under section 80TTA) | No deduction | No deduction | Deduction up to Rs. 10000 |
The insertion of this new section has been a relief to individual or Hindu undivided family as interest on saving bank account was always a taxable income with no corresponding tax benefits. It would also help in avoiding inclusion of small savings bank interest in the taxable income, which was required to be done after deletion of section 80L.
However, Deduction u/s 80TTA is not available to the senior citizen who is eligible to claim deduction u/s 80TTB. Deduction u/s 80TTB is available to resident senior citizen( i,.e atleast 60 years of age at any time during the previous year.). This deduction is available in respect of interest on deposits with a bank/cooperative bank/post office (interest includes interest on fixed deposit/savings account/any other interest). The quantum of deduction shall be the amount of interest or Rs 50,000 whichever is less.Deduction u/s 80TTB is available wef A.y 2019-20
Extract of Section 80TTA
Deduction in respect of interest on deposits in savings account.
80TTA. (1) Where the gross total income of an assessee [(other than the assessee referred to in section 80TTB)], being an individual or a Hindu undivided family, includes any income by way of interest on deposits (not being time deposits) in a savings account with—
(a) a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);
(b) a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or
(c) a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),
there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee a deduction as specified hereunder, namely:—
(i) in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and
(ii) in any other case, ten thousand rupees.
(2) Where the income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under this section in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body.
Explanation.—For the purposes of this section, “time deposits” means the deposits repayable on expiry of fixed periods.
(Republished with Amendments)
Author Bio
Incase of joint savings account, does husband and wife get 10000 each as deduction?
-Thank you in advance.
1. I have claimed rebate of Rs 150000 under Sec 80C and additional Rs 10000 under Sec 80TTA for AY 2017-18.
2. IT Dept has has disallowed Rs 10000 under Sec 80 TTA and restricted the same to Rs 150000 under Sec VI A . This seems odd as they have raised a demand for Rs 3490.
Can charges debited by bank can be adjusted against bank interest received for calculating deduction under sec 80tta
I have purchased a ready to move flat in a residential complex of 49 flats in sodepur,west bengal on december 2017.The promoter claims service tax@4.5%.It is legal or not?
The above rule specifies of exemption of Rs 3500/- on interest in savings a/c of PO and then Rs 10000 for interest earned in all saving accounts which also includes PO. Let us say we have accounts in various banks & PO with data as under:
1. Interest earned in PO Savings a/c Rs 4500/-
2. Interest on savings accounts in all other banks Rs 9000/- (Total interest received = Rs 13500/-
Then whether Rs 10000/- exemption will be on Rs 13500/- or on Rs 10000/- (4500-3500 + 9000)
I have 20 no FDs in SBI .I got total interest is around 1.2 lacks.TDS is deducted. my salary is in 30% slot. when we submitting the ITR this FD income come in 30% slot.
Sir, Is the interest on the compulsory deposit (CD) of Co-OP bank is to be mention in ITR-1 under Section 80TTA
In FY 2018-19 senior citizens will get Rs. 50000/- exemption from their total annual income. With this, the exemption of Rs. 10000/- for savings bank a/c interest u/s 80tta is absorbed. or say it is 40000/- plus 10000/- under 80tta. Is it so ?
Will interest gain by SBI plus term deposits come inder section TTA or not ? Since there is no time limit.
If the total interest rate from savings account is 8000/- and interest on FD is 15000 then can I enter 10000/- as TTA to claim tax benefit. I believe if yes then in this case 2000/- will be deducted from FD interest rate also which is not right as per the law.
I m a house wife of a retired person having interest income of more than ₹10000 from bank fix deposited, annual income being less than 2•5Lakh.Am I liable for filing of I.T.return. ?
Net taxable income Rs.2,74,000 after 80C& Standard deductionI.i.e.Tax willbeRS.29,779/-.Can I get Rs.2000/- as 80TTA.
sir i took a personal loan of rs 500000 but the whole amount is lying unutilised in the a/c itself. subsequently a total amount of Rs 15000 was credited to that a/c as interest against the lying sum that came from the personal loan. so my query is that, is the sum of 15000 that came from interest taxable or non-taxable?
sir i took a personal loan of rs 50000 but the whole amount is lying unutilised in the a/c itself. subsequently a total amount of Rs 15000 was credited to that a/c as interest against the lying sum that came from the personal loan. so my query is that, is the sum of 15000 that came from interest taxable or non-taxable?
please give me calcution for my 1-4-13 to 31 3 14 income is folllows
1 interst on sb a/c /c 1,45000.00
2 interst on fd s 15000.
3 interst on post s/b a/c 2500
4 share in AOP FIRM 192000
PAID PPF 100000
LIC 21000
PLEASE GIVEE TAX RETURN
MY AGE 63 YEAR AS TODAY
HOPE YOU WILL GOOD ADVICE
Sir,
We are a organization, we have closed on Fixed deposit before maturity of the FD and we have received some amount excess than Actual FD. Now i want to know that, how can account the excess part(Interest on FD) and which type of Income it is?
regards,
satya
I just came to know about this section 80 TTA, and have never availed benefit from it. I have already filed my ITR for this year wherein i showed my whole salary account’s interest value under income from other sources, hence my tax got increased. Is there any way that i can show 10000 under 80 TTA section to reduce my tax now ?
Thanks in advance!
Hi Mukesh, this looks like a glitch or someone has done a mistake. 10000 on 80TTA is over and above 1.5 Lac under 80C.
Sir I have savings account in SBI. SBI auto sweep some amount and pay interest on it and has deducted TDS on it. May you please suggest me whether this interest will be treated as interest on savings account or FD as per Income Tax Rule. Whether I can deducted Rs 10000/- on the above interest as per savings interest rule.
I have 3 Fixed Deposit accounts for which I have opened a Savings bank account. All the interest on these FDs is credited to the same Savings account. The amount shown in form 26AS is total amount I receive which includes interest from FD as well as interest from savings. How do I understand which amount is FD interest and which is savings interest ? Please guide me in this regard and let me know how to claim the amount under section 80TTA of the IT Act .
I have Saving Bank Interest of Rs.7,000/- and there is Negative Interest Income in respect of Interest paid which i had claim under section 57 then total of other income will be negative then my question is can i claim deduction of Rs.7,000/- under section 80TTA with reason…..????
i have three saving bank accounts in different banks and FDs in a bank. The total interest earned in AY16-17 is Rs. 15000.00 and in FD Rs. 180000/- I am in Tax bracket of 30%. Please advice me what is the amount of TAX to be paid for income for Bank interest.
I have received more than 10,000 as interest in my saving accounts (collectively). Do I need to pay income tax on the interest….complete interest or partial interest….?
If so, how to calculate & pay the tax..?
NO
no
Hello
In form 26 for interest on FD/Savings account, section 194A, Total amount shown under “total amountpaid/credited” comprises of interest from both FD+savings interest ? or is it from FD only ?
Thanks
Is 80(TTA) is part of 150000 under 80-C or it is in addition to this? if it is in addition then why is it not allowed?
I have filed my return online for A.Y 2015-16 by claiming a deduction u/s 80(TTA) of Rs 5600/- in addition to 150000/- in respect of 80(C). I have shown the interest income correctly in the other sources schedule under the interest gross head and claimed the same in the chapter VIA schedule under 80(TTA). Recently i received intimation u/s 143(1) where in the deduction u/s 80(TTA) is shown as nil and Chapter VIA deduction shows only Rs 150000/- instead of Rs 155600/-. Please advise if 80(TTA) is part of 150000 under 80-C or it is in addition to this? if it is in addition then why is it not allowed
Tax saving fixed deposit interest exempted or not. help
Dear Sir,
Lately i came to learn that i have to pay tax on the interest earned from my Savings Account.
So would like to know if i my interest earned from the year 2008 till date is as follows.
2008-2009 = Rs 12000
2009-2010 = Rs 15000
2010-2011 = Rs 18000
2011-2012 = Rs 20000
2012-2013 = Rs 20000
2012-2014 = Rs 20000
So want to know for each year how much interest is taxable. Also it will be great help if you can advise some savings scheme where i dont have to pay tax on the interest earned
You will get a deduction of rs 10000. And balance 8000 will be normally taxed under income from other sources
It will not be considered as a savings interest and will be taxable as the income tax act as per the normal rates
Yes rs 4000 will be taxed at the normal rates under income from other sources
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26 JAN 2015, KO HI KYU KIYA AAP, PHELE KYU NEI KIYA BATAIYA…… JAI HO!!!!
Sir, I want to know that I have Bank S/B a/c interest 7900 , Bank RD interest 5400, & Bank FD Interest 27700. Total Interest 41000 Under section 80 TTA can I Fill 10000 Or 7900
2 This Income add under Income from other sources or not if I have income from Salaries
Please reply
Dear All,
Need to clarify a doubt, please advise if i am holding an FD (1 year) and a savings account. Do i need to calculate the tax by adding interest of both the accounts. For eg: If the Interest on FD is 12000/- and S.B is 3000/-
The calculation of tax will be on the total amount which is = 12000+3000 = 15000/-
Thanks,
Tarun
Deduction of 80TTA if Applicable to Association of Person as we are having Saving A/c in the Name of Assessee.
While trying to file return online, e-filing website does not accept 80TTA deduction of 10000/- in addition to 150000 under 80C. Please advise if its part of 150000 under 80-C or should in addition to this. Also MY BANK S.B.I CONVERTS THE INTEREST OF MY SAVINGS ACCOUNT IN TO MOD A/C. I WANT TO KNOW WHETHER IT IS CONSIDERED SAVINGS INTEREST OR NOT.
Online self assessment tax for the assessment year 2015-16 can be paid by relative or others net banking account or debit card.
WHILE FILLING MY I TAX RETURN 2015-16 I FILL MY SAVINGS INTEREST UNDER HEAD 80TTA BUT IN THE SYSTEM, AMOUNT HAS NOT SHOWN IN THE RIGHT SIDE OF ITR AND TAX RETURN SHOWS SOME AMOUNT PAYABLE INSTEAD OF REFUND . THE RETURN FILED SUCESSFULLY, WHAT CAN I DO TO AMEND THE RETURN AND GET REFUND INSTEAD OF PAY.
THANKS AND REGARDS
Hi All,
I know you have lots of queries, I’m a Chartered accountant by profession. You can send all your queries to me at ashwani.dhawan99@gmail.com or call me at 8130098077 and i’ll reply to you free of cost.
Regards,
Ashwani
Respected Sir,
I have just submitted my e return. I have earned interest on saving account to the tune of Rs 900 in FY 2014-15 . However due to lack of knowledge i altogether omitted to show this while submitting e return.
Kindly advice what should i do as a corrective measure.
Hi,
I am Indian Citizen. In FY 2014-15 I was in Canada from 1st April-2014 till 15th March-2015. I received my salary after tax deduction as per Canada Tax deduction rules. Even for these 16 days (march 16 to 31st) I didn’t receive salary as this was paid in next month as arrears.
For this FY (14-15) I earned below income:
a. Performance Bonus from my company (Say 20K Rs)
b. Saving Bank Account interests
1)Do I need to pay the tax in India on Income which I earned in Canada ?
While trying to file return online, e-filing website does not accept 80TTA deduction of 10000/- in addition to 150000 under 80C. Please advise if its part of 150000 under 80-C or should in addition to this?
pls reply to Mr. Virender Kumar’s querry
he said on 03/13/2015 at 5:39 PM
If I have multiple savings account in different Banks say 1. Canara bank , 2 HDFC bank , 3. Yes Bank etc …
Can I claim rebate under Section 80TTA of Rs10,000 for each bank or Max rebate is Rs10,000 only irrespective number of different accounts or Banks .
I have two joint account in post so
will I get 14000 as deduction or just 7000
While trying to file return online, e-filing website does not accept 80TTA deduction of 10000/- in addition to 150000 under 80C. Please advise if its part of 150000 under 80-C or should in addition to this?
whether interest on savings bank joint account will be divided by the number of joint account holders in connection with income tax.
Hai
My gross income is 2 lakh 40 thousand rupees per year.
I HAVE 3 SB Accounts (2 sole accounts, 1 either or survivor with mother)
MY MOTHER IS A HOUSEWIFE.
Recently through property sharing my mother received 3 LAKHS CHEQUE.
My mother deposited in HER EITHER OR SURVIVOR ACCOUNT.
WILL I BE TAXABLE???. BECAUSE THE SB ACCOUNT INTEREST ALSO WOULD CROSS 10000 and my GROSS INCOME ALSO WOULD ACROSS 250000 (TAX SLAB)
KINDLY CLARIFY…Expecting a reply at the earliest
Thank You