What is Section 80TTA & 80TTA
Calculator?
Section 80TTA allows you to claim deductions on the interest income earned on saving accounts
with banks, cooperative society & post offices. 80TTA Calculator helps you to determine the
deductions you eligible to claim and the tax you have to pay on the interest on savings
accounts. The savings account can be held in any of the following financial institutions:
- Bank
- Cooperative society
- Post office
How to Calculate 80TTA
Deductions?
The deductions under 80TTA can be calculated with the following:
In a financial year, Mr Sharma gets a salary of Rs. 5,00,000 and earns Rs. 5,000 as interest
on a bank savings account and Rs. 15,000 as interest on fixed deposits. Also, a deduction of
Rs. 10,000 is available under section 80C. Taxable income will be calculated in the following
manner:
Particulars |
Amount |
Amount |
Income from Salary
Less: Standard Deduction |
5,00,000
(50,000) |
4,50,000 |
Income from other sources -Interest on savings account -Interest on
fixed deposits |
5,000 15,000 |
20,000 |
Gross Total Income |
|
4,70,000 |
Less: Chapter VI-A deduction -80C -80TTA |
10,000 5,000 |
(15,000) |
Taxable Salary |
|
4,55,000 |
The highest amount that can be claimed u/s 80TTA is ₹10,000. If your interest income on your
saving bank account is less than ₹10,000, you can claim this entire amount as a deduction u/s
80TTA. If you earn more than ₹10,000 as interest on your saving bank account, your deduction
will be restricted to ₹10,000 u/s 80TTA.
Note : You have to consider your total interest income from all banks in case you have
multiple accounts
Eligibility for Using
80TTA Calculator
To use the 80TTA calculator, you must meet the following criteria:
- You are an Individual or HUF
- For Sec 80TTA to apply, the taxpayer must be under 60 years
- NRIs holding a Non-Resident Ordinary (NRO) savings account are eligible.
- Taxpayers must have opted for the old tax regime.
- You have earned interest income in your savings account
How to claim
deductions under Section 80TTA?
To claim deductions under Section 80TTA, you need to first add your total interest income
under the head ‘Income from Other Sources’ in your return. Then calculate your gross total
income from all the income heads for the financial year. Thus show it as a deduction under
Section 80TTA.