Section 80TTB - Deduction under Section 80TTB

What is Section 80TTB?

The government provides various forms of financial relief to senior citizens to help them lead a serene, leisurely retired life. Various deductions are provided under the Income Tax Act of India to resident tax-paying senior citizens. Section 80TTB is one such deduction introduced by the Government of India in the recent past.

Section 80TTB became a part of the Finance Bill in 2018 and has since been applicable.

Under Section 80TTB of Income Tax Act, senior citizens above the age of 60 are eligible to avail tax deductions up to INR 50,000, which are applicable on the interest income earned during a particular financial year.

Let us take a look at the terms and conditions applicable to avail of the benefits under Section 80TTB.

Deduction applicable under Section 80TTB- Terms & Conditions

The following terms and conditions are applicable to an assessee wanting to avail tax deductions under Section 80TTB:

• The exemption is limited up to INR 50,000 per year on the interest income earned

• Deductions can be claimed by resident senior citizens above the age of 60

• Senior citizens who own fixed deposit or savings accounts at Banks, Co-operative Banks, and Post Offices, earning interest from such deposits and accounts, qualify for the deduction under Section 80TTB.

• The tax deduction of interest income under Section 80TTB is over and above the deduction limit of INR 1.5 Lacs available under section 80C

Eligibility for Claiming Deductions under Section 80TTB

According to the Income Tax Act, deductions under Section 80TTB can be claimed by:

• Taxpayers falling under the category of senior citizens

• Indian Residents

• Senior Citizens owning savings account, fixed deposit account, recurring deposit accounts

• An entity with the aforementioned accounts at banks, post offices, or cooperative societies

Exceptions under Section 80TTB

• Individuals and Hindu Undivided Family apart from senior citizens can’t avail the tax exemption under Section 80TTB

• Non-resident Indians can not avail of 80TTB tax deductions.

• The interest income from a savings account owned specifically by Associate of Persons, firms, and a body of individuals will not be eligible for Section 80TTB deductions

Key differences between Section 80TTA and Section 80TTB

Another popular section for tax deductions is that of Section 80TTA. However, Section 80TTA is often confused with Section 80TTB by many a taxpayer. There are stark differences that can be noticed under the provision of Section 80TTA and Section 80TTB. Following are the key distinctions.

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Conclusion

Section 80TTB has proved to be a boon for senior citizens across India. It provides focused financial convenience to these entities by segregating it from section 80TTA.

Thus, Section 80TTB is a lucrative avenue for senior citizens to avail of tax benefits. In addition to this, there are various sections under the Income Tax Act, such as Section 80C and Section 80D, through which non-senior citizens can benefit from deductions.