Section 80TTB of Income Tax Act
Updated on : Aug. 27, 2022 - 6 p.m. 17 min read.
Old age is often associated with health concerns, both physical and mental, for senior citizens, which takes a heavy toll on their finances. Therefore, it is necessary to provide them with adequate relaxations in the form of tax deductions.
Having this in mind, the government keeps on bringing new rules to simplify lives for senior citizens. The Finance Budget 2018 has chosen to introduce many benefits for our senior citizens. One such important amendment in Budget 2018 (for senior citizens) is the introduction of a new provision – section 80ttb.
Section 80TTB Deduction for Senior Citizens
Section 80 TTB is a provision under the Income Tax Act in India that provides a deduction of up to Rs. 50,000 to senior citizens (aged 60 years and above) on interest income earned from bank deposits, post office deposits, and savings schemes.
The eligibility criteria for claiming deduction under Section 80 TTB are as follows:
The individual claiming the deduction should be a resident of India and should have attained the age of 60 years or more during the relevant financial year.
The interest income should be earned from deposits held in a bank, post office, or any savings scheme notified by the government.
The maximum deduction allowed under this section is Rs. 50,000 per financial year.
Applicability of Section 80TTB
Section 80TTB is a provision whereby a taxpayer who is a resident senior citizen, aged 60 years and above at any time during a Financial Year (FY), can claim a specified amount as a deduction from his gross total income for that FY. This Section is applicable w.e.f. 1st April 2018.
Amount of deductions available under 80TTB
A deduction of Rs 50,000 or a specified income, whichever is lower, is allowed from the gross total income. Specified income is 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
Exceptions to Section 80TTB
Suppose the specified deposits are held by or on behalf of a partnership firm. In that case, an Association of Persons (AOP), or a Body of Individuals (BOI), Section 80TTB deduction is not available for the partner of such a firm or any member of such an AOP or BOI while computing their total income.
Section 80TTA vs 80TTB
Section 80TTA provides deductions similar to Section 80TTB. However, it offers interest deductions only on a savings account held in a bank, co-operative bank, or a post office, from the gross total income of the individual taxpayer or a Hindu Undivided Family (HUF) up to Rs 10,000.