Deduction under section 80TTA of Indian Income Tax is allowed for interest on saving bank accounts subject to the following conditions:-
- Deduction of interest from saving bank is allowed to the Individual and Hindu Undivided Family only.
- The Deduction is allowed only for interest on saving bank account with any bank including co-operative bank and post office.
- Interest received from fix deposits and recurring deposits does not come under this section. In other words, no deduction shall be allowed fo any interest received from fix deposits or recurring deposits.
- The maximum amount of deduction under section 80TTA is Rupees ten thousand only. For example Mr. X received the interest from his saving bank account for Rs.16000/=. In this case, the deduction for Rupees ten thousand shall be allowed under section 80TTA. In other case, Mr. Y earned the interest for Rs.5500/= from his saving bank account. In this case the deduction under section 80TTA, shall be allowed Rs.5500/= only. It means if the amount of interest from saving account is more than Rupees ten thousand then the deduction shall be allowed for Rupees ten thousand only and if the amount of interest from saving bank account is less than Rupees ten thousand then the actual amount of interest shall be allowed as deduction under section 80TTA.
- Please note that the limit of Rs.10000/= is applicable for gross interest received from all saving bank accounts by assessee during a financial year.
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