Deduction in respect of Interest on Deposits in Savings Accounts [Section 80-TTA]
Section 80TTA provides a deduction up to Rs. 10,000 in aggregate to an assessee (being an individual or a Hindu undivided family) in respect of any income by way of interest on deposits (not being time deposits) in a savings account with —
a banking company;
a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or
a post office.
The following Points should be noted –
From the assessment year 2019-20, the above deduction is not available in the case of a senior citizen who is eligible to claim deduction under section 80TTB.
Where the aforesaid income is derived from any deposit in a savings account held by, or on behalf of a firm, an association of persons or a body of individuals, no deduction shall be allowed in respect of such income in computing the total income of any partner of the firm or any member of the association or body.
Post Office Savings Bank Interest Exemption under section 10(15)(i) -
Post Office savings bank interest is exempt up to Rs. 3,500 (in an individual account) and Rs. 7,000 (in a joint account) under section 10(15)(i) .
The cumulative impact of sections 10(15)(i) and 80TTA is as follows—
Interest on Post Office Savings Bank [Exemption under Section 10(15)(i)]
Exemption up to Rs.3500 in single Account and Rs.7000 in a joint Account
Interest on Savings Account with a Bank, Co-operative Bank and Post Office (deduction under section 80TTA)
Deduction up to Rs. 10,000
For the purposes of this section, "time deposits" means the deposits repayable on expiry of fixed periods.
This deduction is allowed whether the individual or HUF is resident or non-resident.
Related Topics...Deductions from Gross Total Income
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