ITR Filing 2021-22: Claim tax deduction of Rs 10,000 if you have a savings bank account; check details here

The last date of filing income tax returns (ITR) for the financial year 2021-22 is July 31, 2022. Taxpayers filing their ITRs under the old regime can benefit from multiple tax deductions and exemptions and need to declare the same before the deadline. 

But few of us are aware of the fact that an income tax deduction of up to Rs 10,000 can be claimed for the interest received from savings bank accounts.  

Under Section 80TTA of the Income Tax Act, 1961, taxpayers are allowed to claim a deduction for the interest earned from saving account. The maximum limit of deduction allowed Section 80TTA is Rs 10,000.

Which income is eligible for deduction under Section 80TTA?

Taxpayers are eligible to claim the deduction under the following conditions: 

• If the income is received from a savings account with a bank
• If the income is received from a savings account with a co-operative society or bank 
• Post-office savings schemes

Notably, the tax benefit can be claimed for any number of accounts till the aggregate interest amount of Rs 10,000. The deduction under section 80TTA is over and above the Rs 1.5 lakh limit of Section 80C.

Meanwhile, it must also be noted that the interest income from fixed deposits or recurring deposits or any other time deposits are not eligible for deduction under Section 80TTA. Interests received from deposits in NBFCs will also not be eligible for tax benefits under Section 80TTA. 

Who is eligible to claim deduction?

Individual taxpayers residing in India and Hindu Undivided Family can claim the deductions under Section TTA when filing their income tax returns. 

NRIs can get tax benefits for their Non-Resident Ordinary or NRO savings accounts under Section 80TTA. 

It is important to note that the senior citizens aged 60 years are not eligible to claim deductions under Section 80TTA as they can claim deductions under Section 80TTB.

Those who opt for the new tax regime under Section 115BAC, can not claim the the tax benefits under Section 80TTA.

How to claim deduction under Section 80TTA?

One must be aware of the fact that this is a deduction and not an exemption. Hence, when filing the ITR, the taxpayer needs to first add his total interest income under the head of ‘Income from Other Sources’. 

The next step is to calculate the gross total income and then show it as a dedcution under Section 80TTA.