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Tax Deduction for Senior Citizens on Interest Income under Section 80TTB

What is Section 80TTB?

Section 80TTB of the Income Tax Act, 1961 allows a resident senior citizen to claim a deduction against interest on the deposit. Under Section 80TTB deduction, senior citizens can claim income tax exemption of upto Rs. 50,000/- on interest income earned. This section aims to provide benefits to old-aged taxpayers in the form of relaxation in interest income. Section 80TTB has certain limits and eligibility criteria which should be followed in order to gain the benefits from the same.

What is the eligibility for Section 80TTB deduction?

Following are the eligibility criteria under Section 80TTB:

  • A resident senior citizen
  • Age should be 60 years or above at any time during the relevant Financial Year (FY)

What is the maximum amount of Deduction under 80TTB?

The maximum amount of deduction available under section 80TTB is lower of the following:

  1. Rs 50,000 interest income
  2. The total amount of interest income for the financial year

Income here means any of the following income in aggregate:

  • Interest on bank deposits (savings or fixed)
  • Interest on deposits held in a co-operative society engaged in the business of banking, including a co-operative land mortgage bank or a co-operative land development bank
  • Interest on post office deposits

What are the exceptions to Section 80TTB?

Following entities are exempted from claiming tax deductions under Section 80TTB of Income Tax Act:

  • Residential individuals and HUFs other than senior citizens.
  • Non-resident Indians.
  • The income generated on savings accounts that are held by entities like – Associate of Persons, a body of individuals or firms.

What are the differences between Section 80TTA vs 80TTB?

Section 80TTBSection 80TTA
Section 80TTB is exclusive for senior citizens.Section 80TTA is applicable to individuals and HUFs except for senior citizens.
Maximum deduction of upto Rs.50,000/- for fixed deposits and saving interest.Maximum deduction of upto Rs.10000/- for saving account interest.
One can claim deductions under this tax provision by filing Section 80TTB.Eligible entities can avail the deductions under Section 80TTA by filing income tax returns.
Deposit accounts like – savings accounts, fixed deposits and recurring deposits qualify for the deductions under this account.Only interest on savings accounts qualifies for a deduction under this section.

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Note: This Post was last updated on June 22, 2023

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