When it comes to covering your immediate short-term needs, a savings account is an interest-bearing account that can be chosen as your personal financial partner. As a taxpayer, you may be aware that interest earned up to a limit of Rs 10,000 on a savings account under Section 80TTA of the Income Tax Act is deductible from tax. And on the other hand, interest earned up to Rs 50,000 on a savings account by seniors can be claimed as a tax deduction under section 80TTB of the Income Tax Act . But did you know that you can claim tax benefits under section 10 (15) (i) of the Income Tax Act.? Here’s how.
Tax benefit available under paragraph 10 (15) (i) of the Income Tax Act
Interest earned on postal savings accounts is tax exempt up to Rs 3,500 per year for individual accounts and up to Rs 7,000 per year for joint accounts, in addition to deductions granted to the elderly in under Articles 80TTA and 80TTB, according to a notification issued by the Government of India, dated June 3, 2011. According to the notification “To the extent of the interest of Rs. 3,500 in the case of an individual account and of Rs. 7,000 in the case of a joint account. “
According to the above rule, a senior under section 80TTA of the Income Tax Act can claim a tax deduction on a postal savings account up to Rs 10,000 or up to Rs 50,000 under section 80 TTB. In addition, under section 80TTA or 80TTB, the individual can claim a tax exemption benefit in accordance with section 10 (15) (i) on interest earned on a postal savings account up to 3 Rs 500 for an individual account and Rs 7,000 for a joint account. .
In addition, excess interest income of Rs 3,500 on a single account or Rs 7,000 on joint accounts may be deducted under Articles 80TTA and 80TTB. It should be noted that the individual cannot claim any other deduction for the same income if a tax exemption has been claimed under section 10 (15) (i) of the Income Tax Act. If the person wishes to benefit from a tax exemption under Article 10 (15), he must declare it under the heading “Exempt income” when filing his income tax return.
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Article first published: Monday, July 12, 2021, 9:11 a.m. [IST]