Income Tax Department has provided relief to the taxpayers by introducing section 80TTA, under which taxpayers can claim deductions of interest ob savings account.
Taxpayers can enjoy benefits, as per section 80TTA on interest earned from the following: -
- Savings Bank Account
- Post Office Savings Account
The taxpayer must know that this is a deduction and not an exemption. That’s the reason why the interest earned on savings account will first be included in the Gross Total Income of a taxpayer under Income from Other sources, then you can claim deductions under section 80TTA. Maximum amount, that can be claimed under this section is Rs. 10,000.
No deduction can be claimed under section 80TTA on the interest earned from Fixed Deposit, that’s why it is taxed under normal tax bracket.
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