Section 80TTA of ITA, 1961 : Section 80Tta: Deduction In Respect Of Interest On Deposits In Savings Account

Explanation using Example

Imagine that Mr. Sharma, a salaried individual, has a savings account with a nationalized bank. Over the course of the financial year, he earns interest of ₹8,000 from his savings account. According to Section 80TTA of the Income-tax Act, 1961, Mr. Sharma can claim a deduction of ₹8,000 while computing his total income for the year, because the interest on savings account does not exceed ₹10,000. This deduction will lower his taxable income, potentially reducing the amount of tax he has to pay.