Section 80TTA of the Income Tax Act 1961 provides deduction on the interest earned on your savings account with a bank, cooperative society or post office, up to Rs.10,000/-.
- Allowed Income:
- From a savings account with a bank
- From a savings account with a co-operative society carrying on the business of banking
- From a savings account with a post office
2. Income which are not allowed:
- Interest from fixed deposits
- Interest from recurring deposits
- Any other time deposits
3. Who can claim deduction:
Individuals or Hindu Undivided Families (HUF) can claim a deduction under 80TTA. Both NRI and Indian Resident are eligible for deduction.
4. Limit for deduction:
Rs.10,000 deduction is allowed u/s 80TTA on the interest earned from savings account.If a person has multiple savings accounts with different banks, then the maximum deduction that can be claimed for all savings accounts put together is Rs.10,000/-.
5. How to claim deduction:
Assessee shall add the total amount of interest in his Gross Total Income. Then deduct the eligible amount (as mentioned in Point 1 above and maximum to Rs. 10,000/-) from the Gross Total Income.