Section 80TTA - Deduction of Saving Account Interest 

Every Indian household has a savings bank account, but only a few of them are aware that savings bank interest is taxed. 

But you can save on the taxes. How? Read on to find out! 

What is Section 80TTA?

Section 80TTA is a provision under the Indian Income Tax Act that allows entities to claim a deduction of up to Rs. 10,000 on the interest income earned from savings accounts. 

Who is Eligible To Claim an 80TTA Deduction?

The below entities are eligible to claim an 80TTA deduction. 

• Individuals 

• HUF (Hindustan Undivided Families)

Can NRIs claim section 80TTA deduction? 

Yes! It is worth noting that NRIs can open two types of savings accounts in India, i.e., NRE and NRO. However, section 80TTA is only available for NRE accounts because the interest earned in these accounts is tax-free. No deduction is available for NRO accounts. 

Important: Citizens above 60 years are not eligible to claim Section 80TTA deduction. There is separate provision u/s 80TTB for them.

Type of Interest Incomes Allowed and Not Allowed as Deduction Under Section 80TTA

Interest Income Types Allowed as Deduction Under Section 80TTA

• Interest income earned from a savings account with a bank. 

• Interest income earned from a savings account with a post office. 

• Interest income earned from a savings account with a cooperative society engaged in banking activities.

Interest Income Types Not Allowed as Deduction Under Section 80TTA

• Interest income from fixed deposits (FD)

• Interest income from recurring deposits (RD)

• Interest income from any kind of time deposits 

• Interest income from savings accounts that are owned on behalf of a company. 

  
  

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