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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
View AnswerIn this case,
whole 14000 is Income from Other Sources and
and Section 80TTA Deduction is 10000
Example 2
Suppose a person has Savngs Bank Interest of Rs 4000
View AnswerIn this case,
whole 4000 is Income from Other Sources and
and Section 80TTA Deduction is 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 |
| Particulars | Case 1 | Case 2 | Case 3 | Case 4 |
| Income from Salaries | 300000 | 300000 | 300000 | 300000 |
| Income from Other Sources | 5000 | 25000 | 30000 | 40000 |
| Gross Total Income | 305000 | 325000 | 330000 | 340000 |
| Less | ||||
| Deductions u/s Chapter VI-A | ||||
| 80TTA | 2000 | 10000 | 0 | 10000 |
| Net Total Income | 303000 | 315000 | 330000 | 330000 |
Tax will be imposed on this Net Total Income
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.
