Section 80TTA Income Tax Act allows a deduction of up to Rs. 10,000 from the taxable income for interest earned on savings accounts

What is Section 80TTA of Income-tax Act?

Section 80TTA​ allows a deduction to taxpayers from the interest income earned from the deposits available in a savings bank account (not being a time deposit).

Who can claim deduction under section 80TTA?

​An individual or a HUF deriving income in the nature of interest on deposits in a saving account can claim a deduction under section 80TTA. This deduction is available to every individual or HUF, irrespective of their residential status.

However, if the individual is a senior citizen, he can claim a deduction in respect of interest on deposits under Section 80TTB​. He is not allowed to claim deduction under this provision.

Who cannot claim a deduction under section 80TTA?

Deduction under this provision is not available to any person other than an Individual or HUF. Where interest income is derived in respect of the saving account held by or on behalf of a firm or AOP or BOI, no deduction shall be allowed to the partner or member in such firm or AOP or BOI, as the case may be.

Which income is eligible for deduction under section 80TTA?

An individual or HUF is eligible to claim a deduction under this provision in respect of interest on deposits in a saving account held with the following:

1. a) A banking company including any bank or banking institution;
2. b) A co-operative society engaged in banking business (including co-operative land mortgage bank or co-operative land development bank); or
3. c) A post office.

How much deduction can be claimed under section 80TTA?

The assessee can claim a deduction of an amount equals to interest credited to his saving account or Rs. 10,000, whichever is lower.