Section 80TTB of the Income Tax Act provides a deduction of up to ₹50,000 for senior citizens on interest income from deposits in banks, cooperative banks, and post office schemes.
Applicable to individuals aged 60 years or above, this provision includes interest earned from savings accounts, fixed deposits, and recurring deposits. The deduction is capped at ₹50,000, and it applies to the total interest income across all banks, preventing double deductions.
Individuals who are 60 years of age or older are considered senior citizens for this section.
The individual must be a resident of India to be eligible for deductions under Section 80TTB of the IT Act.
Senior citizens meeting the age and residential criteria can claim deductions under Section 80TTB for interest income earned from specific sources. The sources include-
Post office monthly income schemes.
The maximum deduction limit under Section 80TTB is ₹50,000 on the total interest income earned during the financial year. If the interest income is less than or equal to ₹50,000, the entire amount is deductible.
The deduction under Section 80TTB is applicable from the assessment year 2018-19 onwards.
Let's consider the case of a senior citizen, for the financial year 2022-23 where he earns interest income from the following sources -
Savings account interest: ₹20,000
Fixed deposit interest: ₹40,000
Recurring deposit interest: ₹15,000
Post office monthly income scheme interest: ₹25,000
Interest Returns Income
Fixed deposit Interest (A)
Savings account interest (B)
Recurring deposit interest (C)
Post office monthly income scheme interest (D)
Total Taxable Interest Income
Deduction limit under Section 80TTB (F)
Deduction = Minimum of (Total interest income, maximum deduction limit)
G = Min(E,F)
Therefore, he/she can claim a deduction of ₹50,000 under Section 80TTB for the financial year 2022-23.
There is no specific requirement for submitting documents while claiming deductions under Section 80TTB of the Income Tax Act. However, it is important to maintain proper records and documentation, as you may need to provide supporting documents in case of any scrutiny or verification by the tax authorities.
Here are the documents that individuals, especially senior citizens claiming deductions under Section 80TTB, may consider keeping for record-keeping purposes:
Bank statements or passbooks reflecting interest earned from savings accounts.
Interest certificates are provided by banks for fixed deposits and recurring deposits.
Documents from post offices indicating interest income from post office monthly income schemes.
Form 26AS is a consolidated tax statement that provides details of tax credits, including TDS (Tax Deducted at Source) on interest income. Taxpayers can access this statement online.
A copy of the filed Income Tax Return (ITR) acknowledgment, which confirms the details of the income and deductions claimed.
Proof of identity and residence, as these may be required during the filing of income tax returns.
Any other documents related to the specified interest income sources
Yes, interest income from FDs is taxable according to law. However, senior citizens can claim deductions under Section 80TTB.
Yes, Section 80TTB deductions are available for all tax-paying resident individuals over the age of 60.