Income Tax Deduction Under 80 TTA: Which tax deduction can be claimed on savings account interest (Section 80 TTA) This deduction cannot be claimed for interest earned from other deposits such as fixed deposits, recurring deposits etc. Read on to know how deduction can be claimed on savings account interest
An individual earns interest from various sources such as salary, interest from savings account, fixed deposit, rent from house property etc. To save tax on income earned, one can claim tax exemptions and deductions. The tax exemption and deduction can be claimed provided an individual opts for the old, existing income tax regime. However, an individual has an option to opt for the new, concessional income tax regime by forgoing tax-exemptions and deductionsWho can claim deduction under section 80TTA?
If you opt for the old, existing income tax regime while filing ITR for FY 2021-22 (AY 2022-23), then you can claim a tax deduction of up to Rs 10,000 on savings account interest. This deduction can be claimed by individuals whose age is below 60 years. Further, this deduction can be claimed by Hindu Undivided Families (HUF).
Incomes that are covered under section 80TTA
The deduction under section 80TTA can be claimed for interest earned on savings accounts held with a bank, co-operative bank or a post office. For interest earned from other sources such as fixed deposit, recurring deposits, bonds etc., no deduction or tax exemption is available under this section.
What is the maximum amount of deduction that can be claimed under section 80TTA?
An individual can claim maximum deduction of Rs 10,000 for interest earned from all the savings account held with a bank, co-operative bank or post office.
How to claim deduction under section 80TTA
To claim the deduction under section 80TTA, an individual is first required to calculate the total interest received from all the bank accounts and post office savings account(s) during the financial year. The total interest received from the savings account held by an individual will be added to the gross total income.
Once the gross total income is determined, then you can claim deduction under section 80TTA, in the same manner as you claim deduction under sections 80C, 80D etc.
Who cannot claim deduction under section 80TTA?
Do note that senior citizens (aged 60 years and above) can't claim deduction under section 80TTA. They can claim deduction under section 80TTB. The deduction is available for interest earned from savings bank account, fixed deposit, recurring deposit, post office schemes etc.
( Originally published on Jul 26, 2022 )
This story originally appeared on: India Times - Author:Tax Cognition
