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Section 80TTA – Deduction of Interest from Savings Account

Deduction under section 80TTA is applicable from financial year 2012-13.

Eligible Assessee – Individual or HUF (Whether resident or non resident). No benefit is available to partnership firms, company, LLP, AOP etc.

Deductible Amount – Interest on deposits in saving account (not being time deposit) upto a maximum of rs. 10,000. “Time deposits” means the deposits repayable on expiry of fixed periods.

Saving account held with a banking company, a co-operative bank or a post office is eligible for deduction. Deduction is not available on interest from fixed deposits (FD).

This is not an exempted income, therefore while filing return total interest earned is to be shown as income under the head “Income from other sources” and then deduction under section 80TTA is to be taken subject to maximum limit of rs. 10,000.

TDS under section 194A is not applicable on saving bank interest. Therefore no tds is liable to be deducted on interest from savings account.

When interest is received on any deposit in savings account held on behalf of firm, association of persons or body of individuals then no deduction is available in respect of such interest to partner of firm or member of association of persons or body of individuals.

 

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