Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.

DEDUCTION IN RESPECT OF INTEREST ON DEPOSITS IN SAVINGS ACCOUNTS

Claim Proper Deduction of saving bank Interest

Section  80 TTA has been inserted with effect from the assessment year 2013-14. It provides a deduction upto Rs 10000 in aggregate to an assessee(being an individual or a hindu undivided family) in respect of any income by way of interest on deposits(not being time deposits) in a saving acccount with :–
a. A banking company; 
b. A cooperative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank);or
c. A Post office.

However , where the aforesaid income is derived from any deposit in a savings account held by, or on behalf of a firm ,an association of persons or a body of individuals,no deduction shall be allowed in respect of such  income in computing the total income of any partner of the firm or any member of the association or body.
*Post office savings bank interest exemption under section 10(15)(i)- Post office savings bank interest is exempt  up to Rs 3500 (in an individual account)and Rs 7000(in an joint account) under section 10(15)(i) by virtue of Notification No .332/2011,dated June 3,2011,read with Notification No.GSR 607 ,dated June 9, 1989.
The cumulative impact of sections 10(15)(i) and 80TTA is as follows-


Up to the assessment year 2011-12 Rs.
For the assessment year 2012-13 Rs
From the assessment year 2013-14 Rs
Interest on post office savings bank (exemption under section 10(15)(i)
Full Exemption , nothing is taxable.
Exemption up to Rs 3500 in a single account and Rs 7000 in a joint account.
Exemption up to Rs 3500 in a single account and Rs 7000 in a joint account.
Interest on savings account with a bank , cooperative bank and post office (deduction under section 80 TTA)
No Deduction
No Deduction
Deduction up to Rs 10,000

Share This!



6 comments:

  1. I and my wife have a joint savings account.My salary is deposited in this account and home loan deduction is also through this account.My wife transfers (from her account)50% home loan share to this account. Is the interest earned in this savings joint account, applicable for deduction under section 80TTA? If so, Can I, take the full deduction or will there be a split in deduction?

    ReplyDelete
  2. as first holder of the account you can claim deduction up to Rs. 10000/-

    ReplyDelete
  3. Thankyou TAxvani, one more question, Does this joint account form a Body of Individuals, for which section 80TTA is not applicable?

    ReplyDelete
    Replies
    1. Maintaining joint account doesn't mean Body of individuals

      Delete
  4. IS DEDUCTION ALLOWED FOR POST OFFICE SAVING INT U/S 80TTA AND EXEMPTION U/S 10(15) BOTH SIMULTANEOUSLY???
    WILL IT NOT COUNT TO DOUBLE BENEFIT TO TAX PAYER??

    ReplyDelete
  5. under what interest money government gives 10000 except on a single account interest or all the account interest money-10000?

    ReplyDelete