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80TTA- Deduction in respect of interest on savings deposit accounts

    [Updated as on Dec 31, 2019]

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• Deduction is available to an assesee being an individual and Hindu Undivided Family other than senior citizens under Section 80TTA.

• Deduction is available on the interest amount earned on deposits other than time deposits in a savings account with a bank, cooperative banks or post offices and which is included in the gross total income of the assessee.

• If any interest is earned on any deposits in a savings account held by, or on behalf of any firm, an association of persons or a body of individuals, no deduction shall be allowed in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body.

• For the purposes of this section, "time deposits" means the deposits repayable on expiry of fixed periods

 

Amount of deduction

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The amount of deduction allowable shall be lower of the following:

• Interest earned on such deposits

• Ten thousand rupees

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Illustrations on Section 80TTA

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1. Raju has received Rs.12800 as interest against various fixed deposits with SBI. What is his      eligible deduction amount under section 80TTA?

        No deduction is allowable under section 80TTA for Raju as only interest amount earned on deposits other than time deposits in a savings account qualifies for deduction under this section

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2. Shalini has earned interest income for Rs.10500 in her savings account for the FY 2018-19. Whether she is eligible for deduction under section 80TTA?

          She is eligible for deduction of Rs.10000 only since it exceeds the maximum limit allowable of Rs.10000 for AY 2019-20.

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