Section 80TTA – Deduction in respect of interest on deposits in savings accounts.
Deduction under section 80TTA is available to Individual and HUF (Other than resident senior citizen)
Interest on deposits in saving account with a banking company, or any post office, or any co-operative society engaged in the banking business, etc.
In case of Interest on Post Office savings Bank u/s 10(15)(i): Interest is exempt up to Rs.3,500 in case the account holder status is “single” and Rs.7,000 in a joint account holders.
(a) Amount of Interest
(b) Rs.10,000; whichever is lower.
- The above-mentioned deduction is not available in the case of a senior citizen who is eligible to claim deduction under section 80TTB.
- However, if the income is derived from any deposit in a savings account held by, or on behalf of a firm, an AOP or BOI, then no deduction u/s 80TTA shall be allowed in respect of such income in computing the total income of any partner of the firm or any member of AOP or BOI.
Section 80TTB – Deduction in respect of interest on deposits.
Available to any senior citizen, applicable from assessment year 2019-20 if the following below mentioned conditions are satisfied: –
- The assessee should be a resident individual who is at least 60 years of age at any time during the relevant previous year.
- His income includes Interest on deposits with a banking company, a post office, co-operative society engaged in banking business, etc.
(a) Amount of Interest
(b) Rs.50,000; whichever is lower.
Besides that, if the income is derived from any deposit in a savings account held by, or on behalf of a firm, an AOP or BOI, then no deduction u/s 80TTA shall be allowed in respect of such income in computing the total income of any partner of the firm or any member of AOP or BOI.
Let us understand the deduction of 80TTB via example
Suppose Mr. A (Senior Citizen – Age 63), has the following Income:
Interest from Saving Bank Account Rs.6,046/-, Interest on FDR Rs.2,83,955/- and Interest on Income Tax Refund Rs.2/-.
Determine the deduction u/s 80TTB and Compute the Income of Mr. A for AY 2020-21.
|Computation of Total Income||Sub Total||Total Amount (In Rupees)|
|Income from Other Sources (Chapter IV F)|
|Interest from Saving Bank A/c||6,046|
|Interest on F.D.R.||2,83,955|
|Interest from IT Refund||2||2,90,003|
|Gross Total Income||2,90,003|
|Less: Deductions (Chapter VI-A)|
|u/s 80TTB (Interest from Saving Bank Account & FDR.)||50,000||50,000|
|Round off u/s 288 A||2,40,000|
Deduction in respect of Royalty Income under Section 80QQB and Section 80RRB.
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CA Devesh Thakur
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