Section 80TTB of the Income Tax Act

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.

Eligibility Criteria

1. Age Requirement

Individuals who are 60 years of age or older are considered senior citizens for this section.

2. Resident Status

The individual must be a resident of India to be eligible for deductions under Section 80TTB of the IT Act.

Who Can Claim Deductions Under Section 80TTB?

Senior citizens meeting the age and residential criteria can claim deductions under Section 80TTB for interest income earned from specific sources. The sources include-

  • Savings accounts

  • Fixed deposits

  • Recurring deposits

  • Post office monthly income schemes.

Deduction Limit

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.

Applicability Period

The deduction under Section 80TTB is applicable from the assessment year 2018-19 onwards.

How to Calculate Your Deductions Under Section 80TTB?

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

Amount (₹)

Fixed deposit Interest (A)

₹20,000

Savings account interest (B)

₹40,000

Recurring deposit interest (C)

₹15,000

Post office monthly income scheme interest (D)

₹25,000

Total Taxable Interest Income

E= (A+B+C+D)

₹1,00,000

Deduction limit under Section 80TTB (F)

₹50,000

Deduction = Minimum of (Total interest income, maximum deduction limit)


G = Min(E,F)

₹50,000

Therefore, he/she can claim a deduction of ₹50,000 under Section 80TTB for the financial year 2022-23.

Documents Required

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:

1. Interest Income Documents:

  • 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.

2. Form 26AS

  • 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.

3. Income Tax Return (ITR) Acknowledgment

  • A copy of the filed Income Tax Return (ITR) acknowledgment, which confirms the details of the income and deductions claimed.

4. Identification Documents

  • Proof of identity and residence, as these may be required during the filing of income tax returns.

5. Any Other Relevant Documents

  • Any other documents related to the specified interest income sources

FAQs

Is fixed deposit interest income taxable for senior citizens?

Yes, interest income from FDs is taxable according to law. However, senior citizens can claim deductions under Section 80TTB.

Are senior citizens eligible for deductions under Section 80TTB of the IT Act?

Yes, Section 80TTB deductions are available for all tax-paying resident individuals over the age of 60.

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