Interest earned on Saving Bank Account is Taxable subject to deduction under section 80TTA.
What is Section 80TTA?
Section 80TTA of the Income Tax Act 1961 provides a deduction in respect of interest earned on savings account.
Who is eligible to Claim Deduction under section 80TTA?
Deduction under section 80TTA is available only to Individual and HUFs (Hindu Undivided Family).
Type of Interest Income Exempt:
Interest earned on Saving account with Bank, Post Office, Co-operative Society Carrying on Banking Business.
It is important to note that this deduction is not applicable for interest earned from fixed deposits, recurring deposits, or any other type of time deposits.
Maximum Amount of Deduction:
The maximum amount of deduction is limited to Rs. 10,000 in a financial year.
How to Claim Deduction under section 80TTA?
To claim deduction under section 80TTA of The Income Tax Act 1961, individuals and HUFs need to report the interest earned from their savings account in the ‘Income from Other Sources’ section of their Income Tax Return (ITR) and the deduction can be claimed under Section 80TTA in Deduction Section.
In conclusion, individuals and HUFs can avail a deduction under Section 80TTA of the Income Tax Act 1961 for the interest earned from their savings account. It is important to accurately report this interest in the ITR filing and claim the deduction to reduce the taxable income.
