Deduction under section 80TTA

Deduction under section 80TTA
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Deduction under section 80TTA

Deduction under section 80TTA in respect of interest income on deposits from a savings bank account was introduced in the Finance Bill, 2013. This section provides relief that interest income up to Rs. 10,000/- will not be charged to tax.

Details of the section
Section 80TTADeduction in respect of interest on deposits in savings account
Eligible AssesseeIndividuals up to the age of 60 years and HUF
Maximum deductionRs. 10,000/-
Conditions to avail the deduction

Interest income should be earned from

  • A savings account with a BANK
  • A savings account with a CO-OPERATIVE BANK 
  • A savings account with a POST OFFICE 

Note: Interest income derived by keeping deposits with companies, firms, or Non-Banking Finance Companies (NBFCs) will not be eligible for deduction under this section.

To claim the deduction one needs to first show the interest income under the head “Income from Other Sources” and then claim the deduction under section 80TTA.

What is the amount of maximum deduction allowed under this section 80TTA?

The maximum deduction available while computing the total income of the assessee will be

  • Rs. 10,000/- or
  • Amount of such interest income

whichever is lower.

Note: Total interest income derived from deposits from all the specified institutions shall be taken into account.

Can a senior citizen claim deduction in respect of interest on deposits in savings account under section 80TTA?

NO. Provisions relating to deduction in respect of interest on deposits in savings account for individuals above 60 years of age (senior citizens) are covered under section 80TTB of the Income-Tax Act,1961.

Is it possible to claim a deduction for interest from fixed deposits under section 80TTA?

NO. Interest income earned by way of time deposits has been specifically excluded from the purview of deduction u/s 80TTA. Time deposits mean the deposits that are repayable on the expiry of fixed terms. Hence interest income from the fixed deposits will not be eligible for deduction under section 80TTA.

Is it possible to claim a deduction for interest from recurring deposits/term deposits under section 80TTA?

NO. Interest income earned by way of time deposits has been specifically excluded from the purview of deduction u/s 80TTA. Time deposits mean the deposits that are repayable on the expiry of fixed terms. Hence interest income from the recurring deposits/term deposits will not be eligible for deduction under section 80TTA.



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CA Ankita Khetan
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