Interest on savings account has income tax exemption up to Rs. 10,000 from 01 April 2013. The new
Section 80TTA has been introduced from the Financial Year 2012-13 and it allows
to an employee from his gross total income if it includes any income by way of
interest on deposits (not being time deposits)
in a savings account.
Eligibility for 80TTA
Individuals and HUFs who earn interest on their deposit in a savings account can claim tax exemption on such interest. Savings account can be with a bank, post office or co-operative society doing banking business. This deduction is not valid for time deposits like FD and RD. The deduction is available, if such savings account is maintained in a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); co-operative society engaged in carrying on the business of banking (including a cooperative land mortgage bank or a co-operative land development bank); or Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898. For this section, "time deposits" means the deposits repayable on expiry of fixed periods.
If the savings account is held on behalf of a firm, association of persons or body of individuals this deduction is not applicable.
Maximum deduction limit under 80TTA
In a case where the amount of such income does not exceed in the aggregate ten Rs. 10,000 as savings deposit interest can be claimed as exemption under section 80TTA. If the interest is lesser then that amount can be claimed.
How to get 80TTA deduction
Tax rebate under section 80TTA is over and above other chapter VI-A deductions like 80C, 80D etc. You can submit certificate from bank to your employer to get this deduction from salary TDS. If you don't do this, you can still claim it by putting the amount in cell for 80TTA under Chapter VI-A deductions in ITR form while filing tax returns.
Eligibility for 80TTA
Individuals and HUFs who earn interest on their deposit in a savings account can claim tax exemption on such interest. Savings account can be with a bank, post office or co-operative society doing banking business. This deduction is not valid for time deposits like FD and RD. The deduction is available, if such savings account is maintained in a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); co-operative society engaged in carrying on the business of banking (including a cooperative land mortgage bank or a co-operative land development bank); or Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898. For this section, "time deposits" means the deposits repayable on expiry of fixed periods.
If the savings account is held on behalf of a firm, association of persons or body of individuals this deduction is not applicable.
Maximum deduction limit under 80TTA
In a case where the amount of such income does not exceed in the aggregate ten Rs. 10,000 as savings deposit interest can be claimed as exemption under section 80TTA. If the interest is lesser then that amount can be claimed.
How to get 80TTA deduction
Tax rebate under section 80TTA is over and above other chapter VI-A deductions like 80C, 80D etc. You can submit certificate from bank to your employer to get this deduction from salary TDS. If you don't do this, you can still claim it by putting the amount in cell for 80TTA under Chapter VI-A deductions in ITR form while filing tax returns.
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