Can I Get rebate of 10000 under 80TTA for automatic FD(sweep in type with 1 yr maturity) by bank

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  1. nitinkhola

    nitinkhola New Member

    Hi,
    I have a saving account with HDFC bank, whenever my account balance go above 1lakh the bank automatically creates a fixed deposit account with maturity of 1 yr . The fd can be braked any time there is no restriction on it and the fd amount comes back in saving account with some interest.

    My question is : Can I avail tax rebate of 10000 on interest earned on this kind of fds under 80TTA as the fd done by bank dont have any hard time limits?
    Or these kind of fds are treated in same ways as fd with long maturity time of 5-15 yrs , and no rebate is given on interest erned under 80TTA ?
     
  2. ZED

    ZED Well-Known Member

    These are also considered as normal Term deposit because tenure for such a deposit is also fixed. You might have noticed the tax deduction on such interest income.
    Only the saving bank interest is outside the purview of TDS provisions and it is only the saving bank interest in respect of which deduction is available u/s 80TTA.


    That's the reason why following explanation was inserted u/s 194A
    Explanation 1.—For the purposes of clauses (i), (vii) and (viia), "time deposits" means deposits (including recurring deposits) repayable on the expiry of fixed periods.
     
    V K Khanna and nitinkhola like this.
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