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Deductions under section 80c and 80tta

09 May 2016

Dear all, If an individual makes investment which is eligible for deduction under section 80C receives any interest thereon, whether the interest is available as deduction under section 80TTA?

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9 Replies

CA ABHAY GUPTA (Practice) (3230 Points)
Replied 09 May 2016

under section 80tta deduction is of interest earned from saving bank account only...limit is amount received or rs 10000 whichever is lower...
thus there is no link betwee 80c and 80tta

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Vinay somani (CA, CS) (Assistant Manager-Accounts) (549 Points)
Replied 10 May 2016

Agree with Abhay Gupta

Vikas Gupta (Tax Executive) (530 Points)
Replied 10 May 2016

Interest received on investments made u/s 80C may be treated as "Income form Other Sources". Deduction u/s 80TTA (as explained by CA Abhay Ji) is available against interest on saving bank account only (and not interest on investments made u/s 80C) the maximum limit of which is currently Rs. 10000/- only. And thus, 80C & 80TTA are not inter-linked.

Udgam Koomar (Tax Technologist) (1949 Points)
Replied 10 May 2016

80TTA only from saving accounts regular interest

CMA Sivapriya (-) (238 Points)
Replied 10 May 2016

Suppose the interest received from the investment made in a bank covered under 80C is directly credited to the savings account of the individual in the same bank as per standing instruction, whether 80TTA applies?

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Harshad Kanekar (Taxation and Accounts Executive) (314 Points)
Replied 10 May 2016

Sivapriya,

If the amt is credited in bank then it has no link as such of 80C and hence deduction on interest on Saving bank is eligible for Deduction u/s 80TTA even if it was recd from investment from 80C like LIC on Maturity.

shivam agarwal (ca student) (175 Points)
Replied 10 May 2016

80TTA is for interest which is received on deposits in which term is not decided whether deposits with banks or post office.

80c contains only such type of deposits in which term is dicided at the time of creation of deposits

so there is no deposits which was invested as per terms of sec 80c on which interest in allowed under sec 80TTA.

CMA Sivapriya (-) (238 Points)
Replied 12 May 2016

Kindly solve the example:

An investment of Rs.200000 (e.g deposit in bank) made which is covered under 80C by Mr.A(mentioned as first name) & Mrs.A as joint holders.

Mr A's GTI is Rs.600000 and that of Mrs.A is Rs.50000. Mrs.A has submitted form 15G with the bank. Both are having PAN.

Deduction will be available to Mr.A being the first mentioned person. What is the taxability of the interest receipt with respect to TDS, if the interest is credited to the account of

1. Mr.A

2.Mrs.A

Harshad Kanekar (Taxation and Accounts Executive) (314 Points)
Replied 14 June 2016

As per my knowledge, the interest recd. in the bank account can be taken as income of Mr. A as deduction is claimed for Mr. A irrespective of receipt either by Mr. A or Mrs. A.