How to claim 80 TTA deductions for FY 2021-22 Under Section 80TTA, if you earn your bank deposit,
it will be discounted (but not fully).
Income received in the form of
interest from a bank savings account is taxable, however, up to Rs. 10000
discount is given u / s 80 TTA discount limit.
Interest on income from bank
deposits are taxable under "Income from other sources" if it exceeds
Rs.10,000.
How to
calculate 80tta discount amount
Calculating the amount of interest
earned on a bank deposit is not rocket science.
Quarterly, half-yearly or annual
post office savings are counted as savings and the amount of the savings bank
account is treated as interest income.
Deduction under section 80TTA is
not available to senior citizens.
The process of deducting furniture
claims
Income from interest should be
arranged under income from other sources of ITR form.
Declare actual interest income
under section 80TTA of the ITR form.
Sometimes the taxpayer forgets to
disclose the details like income and as a result inconsistencies in the form
occur.
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The interest earned on the deposit
at the time of this deposit is not allowed. Time deposit means refundable
deposit after the expiry of the specified period. Will not be allowed -
Interest from fixed deposits
Interest from recurring deposits
No other time deposit
Section 80TTB for senior citizens
Section 80TTB is a new amendment
introduced in the 2018 budget for senior citizens.
Senior citizens can avail themselves an interest
income up to Rs 50,000 U/s TTB on all types of interest income.
Let's consider the following income
for a senior citizen:
Interest on bank deposits (savings
or fixed).
Interest on deposits held in
cooperative societies.
Interest in post office deposits.
Tax exemption under section 10 (15)(i)
Up to Rs.10,000/- Earned from Post Office Savings Bank under Section 10 (15) (i). 3500 for individuals and Rs. 7000 for joint accounts.
The best part is the growing effect of Section 10 (15) (i) and 80TTA that exemption can be claimed under Section 10 (15) (i) in addition to deductions under Section 80TTA.
The difference between section
80TTA and 80TTB
Important Note: - Section 80TTB has
been introduced in the 2018 budget for senior citizens.
Examples of tax savings between 80TTA and 80TTB
|
Particulars |
Normal taxpayer |
Senior Citizen |
|
Interest Income from Savings account |
15,000 |
5,000 |
|
Interest Income from Fixed Deposit |
50,000 |
50,000 |
|
Interest Income from Recurring Deposit |
20,000 |
20,000 |
|
Total Income |
85,000 |
75,000 |
|
Less: Deduction under Section 80TTA |
10,000 |
N/A |
|
Less: Deduction under Section 80TTB |
N/A |
50,000 |
|
Taxable Income |
75,000 |
25,000 |
|
Tax |
As per Tax Slab |
As per Tax Slab |
How to claim 80 TTA deductions for FY 2021-22 on interest income bank deposits.
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However, you can avoid deducting TDS on interest income by equipping Form 15G / 15H.
FAQ U/ s 80TTA and 80TTB
Q: If there is more than one
savings account is the interest income of each account eligible for tax
deduction?
A: No, you need to add all the
interest income to all your savings accounts, and then apply u / s 80 TTA &
80 TTB
Q: Does the bank deduct TDS from
interest from savings account for a senior citizen and general taxpayer?
Answer: No, TDS is not applicable
on interest on the savings account, but the bank deducts TDS from the interest
paid against the fixed deposit or recurring deposit. Submission of 15G /15 H Tds
form to the account holder FD or RD will not be deducted.
Q: If the interest income from the
savings account exceeds the deduction limit i.e. 10,000 for the general
taxpayer and 50,000 for the senior citizen. What will be the tax context?
Ans: You have to enter the maximum
exemption account in the 80TTA / 80TTB column of the income tax form and the
remaining amount required to specify income from other sources.
Q: Is interest from a savings
account in
Answer: Interest from a savings account is discounted up to 80tta maximum limit of Rs.10,000 for the general taxpayer and up to 50,000 u / s 80ttb for senior citizens. It is also mandatory to disclose your full income from the savings account interest under income from other sources.
