A new deduction in the income tax has been introduced in this budget, interest on saving account deduction. Under section 80TTA of income tax act, the deduction is allowed on saving account interest up to 10000 per annum. This deduction is available to individual and HUF. This deduction is available to interest on saving account and not to time deposit. The saving account may be with any of the three mentioned below.
1- Any bank or banking company
2- Co-operative society which is in the business of banking.
3- Post office.
This deduction is for individual and HUF and not for partnership, firms or company. For these kinds of entity no deduction is allowed under section 80TTA.
This deduction is available for the assessee from 1 April 2013.
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