80TTA Calculator - Deduction for Interest Earned on Savings Account

This 80TTA deduction calculator provides you with an idea of how many deductions you can claim against the interest earned on the savings accounts from your gross total income. This tool helps you to plan your taxes in advance so that you can save more.

Section 80TTA allows you to claim deductions on the interest income earned on saving accounts with banks, cooperative societies, and post offices. 80TTA Calculator helps you determine the deductions you are eligible to claim and the tax you must pay on the interest on savings accounts. The savings account can be held in any of the following financial institutions:

1. Bank
2. Cooperative society
3. Post office

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:

The highest amount that can be claimed u/s 80TTA is ₹10,000. If your interest income on your savings 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 savings 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

This calculator is part of our larger suite of calculators for you. The 80TTA calculator will help you to understand the deduction under section 80TTA of the Income Tax Act, 1961.

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

Which Type of Interest Incomes are Allowed as Deduction Under Section 80TTA

Under Section 80TTA of the Income Tax Act, 1961 in India, individuals and Hindu Undivided Families (HUFs) are eligible for a deduction on interest income earned from certain sources. The deduction is available for interest earned up to a maximum amount of Rs. 10,000. Here are the types of interest incomes allowed as a deduction under Section 80TTA:

• Savings Account Interest: The deduction under Section 80TTA applies to interest earned on savings bank accounts. It includes interest earned on deposits in a savings account with a bank, cooperative society, or post office.
• Cooperative Society Deposit Interest: Interest earned on deposits in a cooperative society is also eligible for the deduction under Section 80TTA. However, this applies only to deposits made with a cooperative society engaged in banking business.

It's important to note that the deduction limit under Section 80TTA is applicable per individual or HUF and not per account. Therefore, if you have multiple savings accounts or deposits with different banks or cooperative societies, the total interest income from all accounts combined is considered for the deduction, subject to the maximum limit of Rs. 10,000.

Interest Income Not Allowed as Deduction Under Section 80TTA

Under Section 80TTA of the Income Tax Act, 1961 in India, certain types of interest incomes are not allowed as deductions. Here are the interest incomes that are not eligible for deduction under Section 80TTA:

• Fixed Deposit (FD) Interest: Interest earned on fixed deposits, term deposits, or time deposits is not eligible for deduction under Section 80TTA. This includes interest income from bank fixed deposits, corporate fixed deposits, or any other fixed-income investment.
• Recurring Deposit (RD) Interest: Interest earned on recurring deposits is also not eligible for deduction under Section 80TTA. Recurring deposits are a type of savings scheme where individuals deposit a fixed amount every month for a specified period, and interest is earned on the accumulated deposits.
• Corporate Bond Interest: Interest earned on corporate bonds, debentures, or any other interest-bearing securities issued by companies is not eligible for deduction 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.