Section 80TTA- Deduction for Interest on Savings Accounts
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.
The deduction is available on the interest amount earned:
- From a savings account held in a bank
- From savings account held in a post office
- From a savings account held with a co-operative society which carries out banking business
Important note–Income earned from fixed deposits or recurring deposits or time deposits held with any banks or financial institutions or post office is not eligible for deduction under this section.
Maximum Deduction
The maximum amount of deduction available under this section stands at Rs 10,000 per annum. In the interest income is less than Rs 10,000 per annum, then the entire interest amount will be eligible for deduction. If in case, the interest amount for a year exceeds Rs 10,000 per year, then the deduction will be limited to Rs 10,000 and the remaining ones will be taxed accordingly.
