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Section 80TTA deals with the tax rebate available on interest earned in your savings bank account upto a limit of Rs 10,000 in a financial year. This new section was introduced in the finance act 2012 and is applicable from the financial year 2013-14. Only individuals and HUF can claim rebate under this section. The aim of this act is to increase savings and motivate tax payers to park their short term funds in savings accounts and benefit from interest gained.
Section 80TTA tax rebate is for interest earned in normal savings accounts only. The savings account can be with any commercial bank , public or private, cooperative banks or post offices. If the savings account is in the name of a firm or a group of people or a society then this tax rebate will not be applicable.Please note that tax rebate under this section is not applicable for fixed deposits of any term or recurring deposits.
Section 80TTA deductions can be claimed in chapter VI A deductions in addition to existing sections and has a separate limit of Rs 10, 000. This section is not clubbed with any other section under Chapter VI A