Definition
Section 80TTA
Section 80TTA allows individuals (below 60) and HUFs to deduct interest earned on savings bank accounts up to a specified limit.
Section 80TTA lets you deduct interest earned on savings accounts held with banks, co-operative banks and the post office, subject to a modest annual ceiling. Interest beyond the limit, and all interest from fixed or recurring deposits, remains fully taxable.
This benefit is for individuals under the age of 60 and for HUFs. Senior citizens instead use the more generous Section 80TTB, which also covers deposit interest.
80TTA is available only under the old regime. Remember that banks report your interest in Form 26AS and the AIS, so it should be declared even if no TDS was cut.
Related terms
- Section 80TTBSection 80TTB gives senior citizens a larger deduction on interest income from deposits with banks, co-operative banks and the post office.
- Annual Information Statement (AIS)The AIS is a comprehensive statement of a taxpayer's financial transactions reported to the tax department, used to help file accurate returns.
- Savings Account InterestSavings account interest is the modest return banks pay on the balance in your savings account, calculated on daily balances.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.