How to claim the deduction on interest income under section 80TTA/ 80TTB?
Under section 80TTA, if you earn income your bank deposit, that would be exempted (but not wholly).
The income received in the form of interest from a bank savings account is taxable, however, amount up to ₹ 10000 is exempted u/s 80tta.
Income from interest from a bank deposit in any form if exceed from ₹ 10000 is taxable under “Income from other sources“.
How to calculate deduction amount u/s 80TTA
Computation of amount received from interest earned from bank deposits is not rocket science.
The taxpayer required to arrange the bank statement for all your accounts for the particular financial year.
Any interest received quarterly, halfyearly or annually against post office saving and the amount in saving bank account is treated as income received from interest.
Deduction under Section 80TTA is not available to senior citizens.
Section 80TTB for Senior citizen
Section 80TTB is the new amendment introduced in the budget 2018 for the senior citizen.
Senior citizens can avail the benefit of interest income u/s 80TTB up to ₹ 50000 on all kind of interest income.
Let us consider the following incomes for a senior citizen:
- Interest on bank deposits (savings or fixed).
- Interest on deposits held in the co-operative society.
- Interest on post office deposits.
Difference between section 80TTA and 80TTB
Important Note:- Section 80TTB is introduced in budget 2018 for the senior citizen, however, deduction u/s 80TTA will not be allowed from FY 2018-2019.