There is a provision of section 80TTA in the Income Tax Act to claim deduction on interest income. Its limit is 10 thousand rupees.
Know what is the rule regarding tax on interest income.
When you invest (Investment) then first of all know how much will be the return on investment. if you fixed return instrument If you have invested in it, then there will be earning in the form of interest. The interest rate is already known. However, it is also important to know what are the rules regarding tax on interest income. In this article, we will tell you in detail about the rules regarding tax on interest income. There is a provision of section 80TTA in the Income Tax Act to claim deduction on interest income. Under this section, no tax is levied on interest income up to Rs 10,000 in a financial year. Individuals and HUF (Hindu Undivided Family) can take advantage of this section.
CMA Rajesh Kumar Jha As per section 80TTA, not all types of interest income are included. According to the Income Tax Act, the benefit of deduction under this section is available only on the interest in the savings account. This savings account can be in any bank, co-operative bank or post office.
No exemption on interest on FD, RD
Rajesh Kumar Jha said that interest income of fixed deposits, also known as term deposits, recurring deposits and any other type of time deposits is not available under section 80TTA.
limit 10 jars
The limit of this section is 10 thousand rupees. If the interest earned on the savings account is up to Rs 10,000, then tax will not be levied. If the tax income is more than 10 thousand then tax is levied on the additional amount. Earnings from savings account interest gets added to your total income. Now the tax will have to be paid according to the tax bracket the investor falls in. The maximum rate of tax will be 30 percent.
Senior citizens get the benefit of 80TTB
There is a provision of section 80TTB for senior citizens. This is also related to deduction on interest income of savings account. However, its limit is 50 thousand rupees. People of 60 years and above can take advantage of this section.
Rules regarding tax on fixed deposits
Talking about fixed deposits, interest income is taxable in this. TDS is also deducted if the income exceeds 40 thousand, which is 10 percent. In the absence of PAN card, 20 percent TDS will be deducted. FD earns more interest than savings. If you invest in tax saving FD, then you also get the benefit of deduction under section 80C on the investment. The maximum investment that can be made in this is only 1.5 lakh rupees and the tenure should be at least 5 years.
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