Issue/Justification

Section 80TTA was inserted by the Finance Act, 2012 to provide deduction of up to Rs.10,000 in the hands of individuals and HUFs in respect of interest on savings account with banks, post offices and co-operative societies carrying on business of banking.

However, it is unlikely that salaried individuals would keep their entire savings in a savings bank account, which earns a much lower rate of interest as compared to term deposits. They are likely to transfer some portion of their savings to several deposits to earn comparatively better returns. Therefore, since the money is anyway kept within the banking channels, it is suggested to include all types of deposit interest within the ambit of section 80TTA.

Suggestion

Interest on all types of deposits may also be included within the scope of section 80TTA.

(SUGGESTIONS FOR RATIONALIZATION OF THE PROVISIONS OF DIRECT TAX LAWS)

Source-  ICAI Pre-Budget Memorandum–2018 (Direct Taxes and International Tax)

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Category : Income Tax (27499)
Type : News (13634)
Tags : Budget (1956) Budget 2018 (399) ICAI (2602)

One response to “Section 80TTA- Allow deduction of Interest on all types of deposits”

  1. Natwar Mundra says:

    IT WILL BE APPRECIABLE TO INCLUDE FD INTO SEC.80TTA. IT WILL BE MORE ADMIRED IF WE INCREASE THE LIMIT TO Rs.10000/- TO Rs.25000/- P.A.

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