The tax deduction under Section 80TTA is over and above the deduction of ₹ 1.5 lakh, which is deducted under Section 80C. No Tax Deduction at Source (TDS) for savings accounts held by individuals and HUFs.
Under Section 80TTA, a tax deduction of up to INR 10,000 for an eligible assessee can be claimed over and above the INR 1.5 Lac limit of Section 80C. Remember to list interest from savings bank accounts under the Income from Other Sources section while filing for Income Tax.
Deduction under Section 80TTA
You can claim exemption on up to Rs. 10,000 received as interest on your savings account deposits.
What is the deduction limit available under section 80TTA for the financial year 2020-21? A maximum limit of Rs 10000 is available under sec 80tta for fy 2020-21.
Section 80TTA is for a tax deduction on income from savings of individuals and HUFS below 60 years, whereas; 80TTB is applicable for the tax deduction of senior citizens. Moreover, 80TTA excludes savings from the fixed deposit, whereas 80TTB considers savings from all sources.
Deduction under section 80TTA will be allowed only if you have shown income of Rs. 3500 as interest from saving bank a/c otherwise it will be disallowed. if you have shown income of Rs. 3500 as interest on saving bank a/c and still it is disallowed then you can file rectification in e filling portal of Income Tax.
Deduction under Section 80TTA is not allowed on interest earned on time deposits such as fixed deposits, recurring deposits or any other time deposits. Also no tax is deducted at source on interest income on bank savings accounts. Section 80TTA is not applicable to senior citizens.
Under 80TTA of the Income Tax Act, interest up to Rs 10,000 earned from all savings bank accounts is not taxable. This is valid for co-operative banks, post offices or savings bank accounts. If the interest earned from all these sources is more than Rs 10,000, then the extra amount comes under tax deduction.
Section 80TTA vs 80TTB
Section 80TTA provides deductions similar to Section 80TTB. However, it offers interest deductions only on a savings account held in a bank, co-operative bank, or a post office, from the gross total income of the individual taxpayer or a Hindu Undivided Family (HUF) up to Rs 10,000.
Interest generated on a savings bank account is tax-free up to ₹10,000, under section 80TTA of the Income Tax Act. It makes an account with a balance of less than ₹10,000 a tax-free savings account. The additional interest on the savings account will be taxable if the interest earned from these sources exceeds ₹10,000.
80TTA- Savings bank & post office A/c.
An individual can claim for deduction on interest income of up to Rs 10,000 per annum under this section. It is available for both individuals as well as Hindu Undivided Family.
50,000/- under section 80TTB available to senior citizens is over and above deduction up to Rs. 1,50,000 available under section 80C? Yes, it is over and above the limit of Rs 1.5 lakhs u/s 80C.
How to Claim Deduction Under Section 80TTA. First, add your total interest income under the head 'Income from Other Sources' in your return. Calculate your gross total income for the financial year from all the income heads and then show it as a deduction under Section 80TTA.
Deduction under section 80TTA/TTB is not reflected Print
Therefore, if you have savings interest deduction u/s 80TTA/TTB might not be or is partially reflected under Chapter VIA deductions. Read more about the Set-off of losses against Income from other sources.
Thus, a person opting for the new tax regime shall not be entitled to claim deduction u/s 80TTA (Deduction in respect of Interest on deposits in savings account) and 80TTB (Deduction in respect of Interest on deposits in savings account) and 80TTB(Deduction in respect of Interest on deposits to senior citizens).”
Individuals who deposit cash above Rs. 2.5 lakh and senior citizens who deposit cash above Rs. 5 lakh may be scrutinised. Any amount within the specified limit will be excluded from scrutiny considering that the money is from household savings, cash withdrawals, earlier income, and so on.
You can claim a maximum deduction of upto ₹ 1.5 lakhs from your total income under Section 80C.
There is no legal restriction on the maximum amount invested in an ELSS, though the deduction under Section 80C is limited to Rs 1.5 lakh only.
Tax benefits availed under Section 80CCD cannot be claimed again under Section 80C, i.e. the combined deduction under Section 80C and 80 CCD cannot exceed Rs 2 lakhs. The money received from NPS as monthly payments or as surrendered accounts will be liable for taxation as per the applicable provisions.
The main difference between Section 80C and Section 80CCC of the Income Tax Act of 1961 is that under Section 80C, the amount to be paid may come from income that is not chargeable to tax. While under Section 80CCC the funds must be paid out the income that is chargeable to tax.
New Delhi: Indians should be banned from keeping more than ₹ 15 lakhs in cash at home, suggested a team of experts assigned by the Supreme Court to fight and recover black money today.
CBDT has made it mandatory for all banks, including cooperative banks, to report cash deposits aggregating to Rs 10 lakh or more during a financial year, in one or more accounts (other than a current account and time deposit) of an individual.
There is no ceiling on maximum balance in Savings Bank account, except for Minors account and BSBDA-Small Account. (Rule Nos. 11, 12).