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Income Tax efiling in India for FY 2023-24 (AY 2024-25)

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Section 80TTA Deduction for Interest on Saving Accounts

Saving a Bank Account is like a digital piggy bank where interest is earned. Most people have savings accounts but most of them cannot be charged interest on the savings account. Interest earned on savings in a bank account tax subject to income Income from other sources and interest on deposits are also allowed in s / s 80TTA.


What is section 80TTA?

Section 80TTA of the Income Tax Act 1961 provides for deductions from your savings account with a bank, co-operative or post office, up to Rs.10,000 / -. No FD interest deductions available for u / s 80TTA. These deductions are allowed for all individuals and HUFs except the most senior citizens (those aged 60 or older) because they have a different hold Section 80TTB for all. Section 80TTA was introduced in 2013 as part of the Finance Bill passed that year, and came into operation from the 2012-13 financial year onwards and is still in operation.

Who can avail deduction under section 80TTA?

Individuals or Individual Hindu Families (HUFs) may require a deduction of less than 80TTA from interest earned on all of their savings accounts and postal accounts.

Can NRIs claim a deduction under 80TTA?

As Indigenous Indians, Non-Indigenous Indians (NRIs) are also eligible for s / 80TTA deductions.

NRIs can only open NRE and NRO accounts in India. Interest earned on NRE accounts is tax-free. Therefore, the 80TTA benefit is only available to NRO savings accounts. Please note that no deductions are allowed on NRO time deposit.

What is the amount of deduction u/s 80TTA?

Rs.10,000 deducted is allowed / s 80TTA in profits earned on savings account. If a person has multiple savings accounts with different banks, then the maximum deduction that can be claimed from all savings accounts is Rs.10,000 / -

Withholding funds under section 80TTA is more than the 1.5 lakh limit of Section 80C.

Which Organisation’s savings account are covered under Section 80TTA?

Savings accounts under the following institutions fall under Section 80TTA:

  • Banks: Banking companies established in terms of the Banking Regulations Act, 1949. These include all banks and banking institutions established in terms of Section 51 of the same Act.
  • Post Offices: All Indian Government post offices have savings account services.
  • Co-operatives: Co-operatives registered with the government and eligible for savings accounts as part of their banking system.

What are the exclusions from 80TTA?

The output to 80TTA is as follows:

  • Deposits in Non-Banking Companies
  • Interest from Fixed Deposits (FD)
  • Interest from Recurring Deposits (RD)

Conclusion

Section 80TTA of the Income Tax Act, 1961 deals with withholding tax on interest. These arrests apply interest to savings accounts held by individuals or the Hindu Undivided Families (HUF). The maximum deduction that may be required for all savings accounts is Rs.10,000. This catch is in excess of the Rs.1.5 lakh allowed under Section 80C.

Frequently asked questions

No, tax deductions under Section 80TTA are not permitted in the case of a fixed deposit.

Yes, you are eligible for a Section 80TTA Tax Tax if you have a Savings Bank account under a Registered Co-operative.

No, until the total annual income is below the lowest tax rate. you do not have to pay tax on the interest you earn on your savings bank account even if it exceeds Rs.10,000 / - because there is no taxable income.

80 TTA can only be claimed if the examinee has earned interest on the savings account

No, deductions may be claimed by an Older Citizen up to Rs.50,000 under section 80TTB
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Krishna Gopal Varshney co-founder & CEO of Myitronline.com. Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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