Section 88TTA was first introduced in Financial Year 2012-13 (A.Y. 2013-14).
80TTA allows the deduction against the interest from Saving Accounts income under Chapter VI-A, to the following persons:-
- Individuals:– Resident or Non-resident, Senior Citizens or other individuals below 60 years.
- Hindu Undivided Family (HUF)
- Interest received by Partnership Firm, Companies, Association of Persons, Body of Individuals and public charitable trusts etc. does not come under Section 80TTA.
- From Financial 2018-19, new Section 80TTB is introduced for the senior citizens which gives more benefits to the senor citizens. Therefore, Section 80TTA does not apply to the senior citizens with effect from financial year 2018-19.
Type of Interest:– This deduction allows against the interest from:-
- Saving Accounts with Banks,
- Saving Accounts with Post Office and
- Saving Accounts with Co-operative Societies carrying the Banking business.
Note:- Any interest from fixed deposits and recurring deposits or any type of interest other than Saving Accounts, is not allowed for deduction under section 88TTA.
Amount of Deduction:- Maximum amount of deduction under section 80TTA is Rs.10,000/= or the actual amount of interest received from Saving Accounts, which ever is less. For example, Mr. X received interest from Saving Accounts for Rs.12000/=. In this case, the maximum amount of deduction will be Rs.10,000/=. Now, we take another example, suppose Mr. Y received the interest from Saving Accounts for Rs.6,000/=. In this case, the deduction under section 80TTA will be allowed for Rs.6,000/= only.
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