Maximize tax savings
up to ₹46,800 easily
0% commission • Earn upto 1.5% extra returns
This article is about claiming deduction on interest under Section 8oTTA. But first, what is 80TTA? Section 80TTA provides a deduction of Rs 10,000 on interest income. This deduction is available to an Individual and HUF.
Time deposits mean deposits repayable on expiry of fixed periods. It shall not be allowed for –
The maximum deduction is limited to Rs 10,000. If your interest income is less than Rs 10,000, the entire interest income will be your deduction. If your interest income is more than Rs 10,000, your deduction shall be limited to Rs 10,000. (You have to consider your total interest income from all banks where you have accounts).
First add your total interest income under the head ‘Income from Other Sources’ in your Return. The deduction is shown under section 80 Deductions under section 80TTA.
If Mr. A earns salary income of Rs. 2,00,000 and Interest on savings account with a bank is Rs. 5,000 and on fixed deposits is Rs. 15,000 in a financial year. Also, eligible amount for deduction of Rs. 10,000 under section 80C. Then, taxable income will be computed as below:-
|Particulars||Amount (in Rs.)||Amount (in Rs.)|
|Income from Salary||5,00,000|
|Income from other sources|
-Interest on savings account
-Interest on Fixed deposits
|Gross Total Income||5,20,000|
|Chapter VI-A deduction|
Yes, Income Tax Act,1961, requires that every person for whom filing of return is applicable, is expected to report all the incomes earned by that person during the period for which he is filing the return and pay the applicable taxes.
If any person fails to report the Income earned by him during a year, either intentionally or otherwise, when return of such Individual / HUF is picked for scrutiny then they shall be liable to penal provisions for such non compliance and be demanded to pay the tax due along with interest.
Read about 80TTB here