Section 80TTA of the Income-tax Act - deduction for interest earned. Section 80TTA of the Income Tax
Act provides a rebate for interest income. Discounts are available with some limitations and
restrictions. In this article, we have covered everything related to claiming tax exemption due to
interest earned
Tax exemption on interest income.
A Co-operative society that carries
on the banking business.
The assessor can claim tax
exemption when calculating his total income
Tax exemption on the interest
income from time deposit is not available. A time deposit is a deposit that is
payable with a fixed interest rate upon the expiry of a certain period of time.
Therefore, the exemption cannot be given in the following cases:
Interest from fixed deposits
Interest from recurring deposits
No other time deposit
Amount of exemption under Section 80 TTA of the Income Tax Act
The maximum discount allowed under
8TTA is Rs 10,000 for one financial year.
If the total interest is less than
Rs.10,000, the actual interest is discounted.
If the total interest is more than
Rs 10,000, only Rs 10,000 is allowed as tax exemption
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The appraiser must consider its
total interest from all savings bank accounts.
Eligibility to make claims under
80TTA
Cutting approved under 80TTA
The following taxpayers can claim
deductions under Section 80TTA of the Income Tax Act:
Private Taxpayer or Hindu Undivided
Family (HUF)
Indian residents
Non-Resident Indians (NRIs) who own
NRO Savings Accounts
An entity with savings account in
an organization such as a bank, post office or Co-operative society
80TTA discount
The following types of taxpayers
are not eligible for this discount:
Interest income arises from any
deposit in a savings account. The account is on behalf of or on behalf of:
A firm, or
An association of individuals, or
A body of individuals
Then no exemption will be given to
any partner of the firm or any member of the association or any person of the
organization. No discount can be given against the interest income of these
taxpayers while calculating the total income.
Basically, a firm, AOP or BOI
cannot claim interest discounts. And the partner or member receives its income
from these firms, AOP or BOI. Therefore, they cannot claim a cut
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Moreover, even senior citizens
cannot claim a waiver under the 80TTA. They can claim tax benefits within
80TTB.
You must first add interest income
under the heading 'Income from other sources as interest income. You will then
need to claim tax benefits under Section 80TTA under 80 Exemptions.
Income U/s 80TTB as per
the Income Tax Act, 1961
Where a taxpayer's total income
includes any income through interest on the deposit, that income is tax-free.
Ways to earn interest on deposits:
Banking sector &
A post office under the Indian
Postal Office Act, 1898
The assessor can claim tax
exemption when calculating his total income
The maximum allowable discount of
8TTB for a financial year is Rs.
If the total interest is less than
Rs 50,000, the actual interest is discounted.
If the total interest is more than
Rs 50,000, only Rs 50,000 is allowed as tax exemption
The difference
between Section 80TTA and 80 TTB
Section
80TTA
Approved for individual taxpayers
and Hindu Undivided Family (HUF)
Interest earned on deposits with
savings account only
Section
80TTB
Approved only for citizens over 60
years of age
Interest earned: - Deposit with a
savings account - Fixed Deposit, Term Deposit or Recurring Deposit
The exemption limit under section 80TTB is Rs. 50,000 per annum
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