Section 129 — Deduction in respect of interest on deposits in savings account
Old Act equivalent: Section 80TTA of IT Act 1961 Sub-part: Deductions from total income
Statutory Text
- (1) An assessee, being an individual, shall be allowed a deduction of amount paid as interest during a tax year, subject to the provisions of this section, on a loan taken by him from any financial institution or any approved charitable institution, if the—
(a) loan taken is for the purpose of pursuing higher education of himself or his relative; and
(b) payment is made out of his income chargeable to tax.
(2) The deduction referred to in sub-section (1) shall be allowed in computing the total income in respect of the initial tax year and seven tax years immediately suc ceeding the initial tax year, or until the interest referred to in sub-section (1) is fully paid by the assessee, whichever is earlier. (3) For the purposes of this section,—
(a) “approved charitable institution” means a registered non-profit organi- sation where it was approved earlier under the provisions of section 10(23C) of the Income-tax Act, 1961 (43 of 1961), or an institution referred to in section 80G(2)(a) of the said Act;
(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or any other financial institution which the Central Government may, by notification, specify;
(c) “higher education” means any course of study pursued after passing the Senior Secondary Examination or its equivalent from a school, board, or University recognised by the Central Government or State Government, local authority, or by any authority authorised by the Central Government or State Government or local authority to do so;
(d) “initial tax year” means the tax year in which the assessee starts paying the interest on the loan;
(e) “relative”, in relation to an individual, means the spouse and children of that individual, or the student for whom the individual is the legal guardian. Deduction in respect of interest on loan taken for residential house property.
Provisos
None.
Explanations
None.
Tables
Present in statutory text above — see formatted section.
Key Structure
- Applies to: Individual or HUF (not a senior citizen or super-senior citizen)
- Conditions: Interest on deposits in savings account with bank, co-operative society, or post office
- Time limits: Income earned during the tax year
- Monetary limits: Maximum Rs.10,000 (Rs.50,000 for senior citizens under section 194A proviso)
- Exceptions: Does not apply to interest on time/fixed deposits; senior citizens have separate higher limit
Cross-References
- Section 10
- Section 51
- Section 80
Amendment Notes
None noted from the extracted pages.