The provisions of
Section 80TTA of the tax Act could also be read as under:-
Also it is noted that as per the New Income Tax Section 115BAC introduced in Budget 2020. As per the Section 115 BAC you should give your
option as you opt-in as New Tax Regime or Old Tax Regime in the newly
prescribed Form 10-IE. If you choose the New Tax Regime you can not avail this
exemption U/s 80 TTA or if you choose the Old Tax Regime then you can avail
this Exemption U/s 80 TTA.
Exemption interest on deposits within
the savings accounts as per the provisions of Section 80TTA.
Where the gross total income of an assessee (other
than the assessee mentioned in section 80TTB for Senior citizens), being a
private or a Hindu undivided family, includes any income by way of interest on
deposits (not being time deposits) during a bank account with—
1. Banking Concerned: Interest earned from a Savings
Bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including
any bank or banking institution mentioned in section 51 of that Act);
2. Co-operative Society: Savings Interest earned from
a co-operative society (including a
co-operative land mortgage bank or a co-operative exploitation bank); or
3. Post Office: Savings Interest earned from a Post
Office as defined in clause (k) of section 2 of the Indian Post Office Act,
1898 (6 of 1898),
If the above conditions are satisfied the subsequent
deductions are going to be allowed as per Section 80TTA:
A. during a case where the quantity of such income
doesn't exceed within the aggregate Rs.10,000/- the entire of such amount; and
B. in any other case,
Rs.10,000/-
Further where the income mentioned during this
section springs from any deposit during a bank account held by, or on behalf
of, a firm, an association of persons or a body of individuals.
No deduction shall be allowed under this section in
respect of such income in computing the entire income of any partner of the
firm or any member of the association or any individual of the body.
You may also like the Automated Income TaxH.R.A. Exemption Calculator U/s 10(13A)
Applicability of
deduction under section 80TTA?
Section 80TTA Exemption from tax on saving account
interest up to an amount of Rs.10,000/- (Ten Thousand) only. So, it's
considerably clear that Section 80TTA allows saving of tax on interest income
earned from “Savings Accounts” only.
Thus, Section 80TTA does not allow other interest
income received from Banks, financial organization’s from other deposit such as
Recurring Deposits, Fixed Deposits, Company Deposits are not eligible for
getting the benefits of Section 80TTA deduction.
A private or a member of HUF can claim deduction of
tax on interest income up to Rs.10,000/– received from the following:
From a saving account
maintained in a Bank;
From savings account
maintained in a Post office;
From a saving account maintained with a Co-operative
Society completing banking business.
But interest earned from Fixed Deposits, Recurring
Deposits, Term Deposits maintained with Banks, financial organization’s,
Co-operative Societies, Post office, are not eligible for tax deduction under
this section.
You may also like the Automated Income Tax Allin One Value of Perquisites U/s 17(2)
Who can claim 80TTA
Deduction?
As per the provisions of Section 80TTA only
individual and members of Hindu Undivided Family can claim deductions of
Rs.10,000/- for interests earned on deposits held within the savings accounts
only.
Further, it should be kept in mind that 80TTA
deduction is allowed for a maximum amount of Rs.10,000 for interest income
earned from all the bank account altogether maintained in the name of the
assesses.
Is 80TTA applicable for
non residents?
As per Section 80TTA, there are not any restrictions
on Non-residents to say tax exemption on interest income earned from bank
account . However, the utmost amount of deduction is restricted to Rs.10,000
only combining all bank account together.
Can we claim both 80TTA and
80TTB?
The answer is simply No. U/s 80TTB is applicable only
for the Senior Citizens only. As per Section 80TTB, a senior citizen is allowed
to claim deduction Under Section 80TTB up to a maximum amount of Rs.50,000 in a
year,
So, in simple words, the tax Act doesn't allow one to
availed exemption of both under Section 80TTA and 80TTB respectively. Senior
citizens claiming deduction only U/S 80TTB can't enjoy the advantages given under
section 80TTA.
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