Section 80 TTA
Section 80 TTA is applicable from AY 2013-14. Under this section, assesses like Individuals and Hindu Undivided Family, who are earning Interest from Savings account kept with a bank, cooperative bank or post office, will be allowed a deduction of Rs. 10,000 from Gross Total Income.
Who can benefit from section 80 TTA deduction?
Assesses like Individuals and Hindu Undivided Family.
When deduction is not allowed?
This deduction is not allowed for Interest on Savings account earned by, or on behalf of, a firm, an association of persons or a body of individuals, in computing the total income of any partner of the firm or any member of the association of persons or any individual of the body of individuals.
Also, if interest on saving account is not included in total taxable income, then deduction under section 80 TTA cannot be claimed.
Another point to be kept in mind is that deduction under Section 80 TTA is not allowed on Interest on Fixed Deposits (time deposits/term deposits) with Banks. Interest on Fixed deposits with Banks (with duration of 5 or more years) are covered under Section 80 C for deduction.
Although, this is a useful deduction for assesses who were paying tax on interest income from savings account. The question is, practically speaking how many assesses include Interest on savings account in their Total Taxable Income. Also, there is no TDS applicable on Interest paid on savings account. Hence, this income is often missed out from being included in Total taxable income. This deduction has put taxability of Interest on savings account into spotlight.
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