Deductions for Individuals

Income Tax
Deductions Under Chapter VIA

We know that

Interest Income on Savings Bank Account is treated as Income from Other Sources (IOS)

However, deduction for the same is allowed upto Maximum of 10000 under Section 80TTA

Example 1

Suppose a person has Savngs Bank Interest of Rs 14000

Example 2

Suppose a person has Savngs Bank Interest of Rs 4000

Interest Earned on Both Savings and FD

Total Interest Earned whether FD or Savings is Income from Other Sources

80TTA Deduction is only for Interest on Savings Max 10000

Q1 Calculate Gross Total Income,Deductions and Net total Income in following Cases

 Particulars Case 1 Case 2 Case 3 Case 4 Income from Salaries 300000 300000 300000 300000 I nterest Income On FD 3000 13000 30000 0 On Savings 2000 12000 0 40000 Total 5000 25000 30000 40000

Other Points

(1) This deduction available to Individual / HUF. (Both Resident and Non Resident)

(2) Following Interest Income covered

• Savings A/c in a bank
• Saving A/c in a cooperative bank
• Post office saving A/c

(3) This deduction not available for following

• Interest on Fixed Deposits
• Assessee Other Than Individual / HUF (e.g., Not Available to Partnership Firm /Company Etc.)
• Saving A/c held by AOP/BOI/Firms. Its Partners/Members Cannot Claim Deduction Under this Section.

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