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.

Tax Deductions

Extract of Section – 80TTB of Income-tax Act, 1961-  Deduction in respect of interest on deposits in case of senior citizens.

80TTB. (1) Where the gross total income of an assessee, being a senior citizen, includes any income by way of interest on deposits 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—

  (i) in a case where the amount of such income does not exceed in the aggregate fifty thousand rupees, the whole of such amount; and

 (ii) in any other case, fifty thousand rupees.

(2) Where the income referred to in sub-section (1) is derived from any deposit 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, “senior citizen” means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

Comparison of Deduction under Section80TTA and Section 80TTB

Particulars Section 80TTA Section 80TTB Remarks
Applicable wef AY 2013-14 AY 2019-20 Till AY 2018-19 80TTA available to senior citizens also.
Deductor to whom applicable Banks, Cooperative banks, Post offices etc. Banks, Cooperative banks, Post offices etc. Not applicable to other deductors like Companies who may have taken deposits.
Deductee to whom applicable Individuals (other than Senior citizens) & HUF Senior Citizens Either 80TTA or 80TTB can be claimed.
Residential status of deductee Residents & Non-residents Residents only
Type of payment on which applicable Interest on Savings account Interest on Savings account & Fixed Deposits No benefit to persons other than senior citizens for interest on FD.
Maximum deduction 10000 50000 Deductor to give remarks “R” for 80TTB till amount reaches 50,000
Where to claim ITR (as TDS not applicable on interest on savings account) TDS & ITR.

Author Bio

Name: RHYTHM
Qualification: CA in Practice
Company: Mehra Khanna & Co.
Location: delhi, New Delhi, IN
Member Since: 06 Jun 2020 | Total Posts: 1

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