What is 80TTA in income tax?

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what is 80 TTA

. Section 80TTA of the Income Tax Act, 1961, provides a deduction on interest income earned from savings accounts for individual taxpayers and Hindu Undivided Families (HUFs). 

What is 80TTA in New Tax Regime?

Here's a detailed explanation:

• The deduction under Section 80TTA is available to individuals (excluding senior citizens) and HUFs. The account can be held in a bank, co-operative society engaged in banking, or a post office.

• The maximum deduction allowed under Section 80TTA is Rs. 10,000 per financial year. This means the interest earned up to Rs. 10,000 is exempt from taxation, and any interest beyond this limit is taxable as per the individual's applicable tax slab.

• The deduction applies only to interest earned from savings accounts. It does not apply to interest from fixed deposits, recurring deposits, or other time deposits.

• Interest from deposits held in a Non-Resident External (NRE) account is also excluded.

• If an individual has multiple savings accounts, the aggregate interest from all accounts is considered. If the total interest exceeds Rs. 10,000, only the amount up to Rs. 10,000 can be claimed as a deduction.

• While filing the ITR, the interest income should be reported under the head "Income from Other Sources." The deduction can then be claimed under Section 80TTA in the relevant schedule.

• There is no need to submit specific documents while filing the ITR, but it is advisable to keep records of the interest earned from savings accounts, such as bank statements, in case the Income Tax Department requests verification.

• Suppose an individual earns Rs. 12,000 as interest from a savings account. Under Section 80TTA, they can claim a deduction of up to Rs. 10,000. The remaining Rs. 2,000 will be taxable according to their income tax slab.

• Section 80TTA is a beneficial provision for taxpayers to save on taxes from small interest incomes, promoting savings habits among individuals. It's essential to report the correct interest income and claim the deduction appropriately to comply with tax regulations.

This is all about what is section 80TTA of income tax act.

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While calculating the tax one thing we forget to check out is what interest we are getting on your savings. There is no doubt that investing in savings is a great way to secure the future as the amount will increase as per the interest rate but did you know after a limit you have to pay taxes on your savings. Yes, as per section 80 TTA you have to pay taxes on your savings if the limit exceeds. This is what is 80TTA in Income Tax. Read on to get a better insight.

What is section 80TTA in Income Tax?

I will share with you the  Section 80TTA points you need to keep in mind.

• Interest earned up to Rs.10,000 per year is allowed as exemption of tax under 80 TTA as per the Income Tax Act.

• The limit of Rs. 10,000 includes interest from all saving accounts such as banks, co-operative, post offices.

• Interest earned exceeding Rs 10,000 is taxable and the amount which is additional will be taxable under 'Income from other sources'.

• Section 80 TTA is applicable on savings of all bank accounts, not one bank account.

• Deduction as per Section 80TTA is not allowed on interest you earn on time deposits. Some examples of time deposits include fixed deposits, recurring deposits.

• One good news is, Section 80TTA is not applicable for senior citizens. 

Since 80TTA is an important section I will explain the points in Hindi as well.

What is 80TTA in Income Tax in hindi?

• आयकर अधिनियम के अनुसार 80TTA के तहत कर में छूट के रूप में प्रति वर्ष 10,000 रुपये तक अर्जित ब्याज।

• रुपये की सीमा 10,000 में बैंक, सहकारी, डाकघर जैसे सभी बचत खातों से ब्याज शामिल है।

• 10,000 रुपये से अधिक अर्जित ब्याज कर योग्य है और जो राशि अतिरिक्त है वह 'अन्य स्रोत से आय' के तहत कर योग्य होगी'।

• धारा 80TTA एक बैंक खाते के बजाय सभी बैंक खातों की बचत पर लागू होता है।

• सावधि जमा पर अर्जित ब्याज पर धारा 80TTA के अनुसार कटौती की अनुमति नहीं है। सावधि जमा के कुछ उदाहरणों में सावधि जमा, आवर्ती जमा शामिल हैं।

• एक अच्छी खबर यह है कि धारा 80TTA वरिष्ठ नागरिकों के लिए लागू नहीं है।

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what is 80TTA in Income Tax in a nutshell.

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