Deduction for savings account interest income
Section 80TTA allows HUFs or individuals to claim exemption up to Rupees Ten Thousand interest from savings accounts. The difference is based on the interest earned on an account held in a bank, post office, or cooperative society. The maximum withdrawal limit is Rupees Ten Thousand irrespective of the amount of interest earned.
Restriction
Therefore, It is important to note that income under section 80TTA is not available for interest earned on fixed deposits, recurring deposits, and other time schemes. Also, the exemption is not available for Non-Resident Indians (NRIs).
Reducing interest income for seniors
In other words, Section 80TTB is a recent amendment to provide exemption on interest earned on deposits to senior citizens. This section was introduced by the Finance Act 2018 and applies to people aged 60 and over. Although higher than section 80TTA, the deduction under section 80TTB is Rs. 50,000.
However, Senior citizens can claim this deduction on interest earned on savings accounts, fixed deposits, recurring deposits, or other fixed deposits.
Restriction
For instance, It is noted that exemption U/s 80TTB is allowed for HUF or senior citizens. The maximum payment limit under this section is 50,000 rubles.
Above all,
All individuals and HUFs can claim an exemption under section 80TTA. As per section 80TTB, all seniors aged 60 and above can claim an exemption.
In addition,
Exemption U/s 80TTA and section 80TTB are not allowed for interest income from other sources than savings accounts or deposits. For an instant, interest earned on bonds, stocks, or mutual funds does not eligible for these deductions.
After that,
In addition, it is important to declare all interest income earned in savings accounts or on your income tax return. Failure to comply with this requirement may result in a notice from the Internal Revenue Service and may result in fines.
Benefits of section 80TTA and section 80TTB claims
Some of the benefits of Section 80TTA and 80TTB are:
Claiming deductions under section 80TTA and section 80TTB can reduce the taxable income, which
further reduces the overall tax liability.
Divorce can help people save large amounts of money, especially seniors with limited sources of income.
Documents Required to Claim Exemption
To avail of an exemption U/s 80TTA or Section 80TTB, individuals indispensable to submit the below-given documents:
Bank account
Interest certificates
Proof of age
Card
Any other government-issued ID
Withdrawals from joint accounts
In the case of joint accounts, income under section 80TTA or section 80TTB can be claimed by the first account holder. In this case, the 2nd account holder is a also Sr.Citizen, then both can claim a Section 80TTB deduction on interest earned on his deposit portion. Tax credits are available to each account holder on a separate card basis.
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