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.

Sr. no

Section 80TTA

Section 80TTB

1

Availed by individuals and HUF who are not senior citizens

Availed by senior citizens

2

Fixed Deposits do not qualify under 80TTA

Savings bank accounts, fixed deposits, recurring deposit accounts qualify

3

Exemption limit is INR 10,000 per annum

Exemption limit is INR 50,000 per year

4

NRIs with NRO account are eligible

NRIs are not eligible

If you opt for health insurance for your parents, you could get additional deductions of up to Rs. 25,000. You can secure Section 80D deductions by getting the Bajaj Allianz Health Insurance on Finserv MARKETS. In addition to the plethora of tax benefits, you can also score a number of perks and benefits, such as coverage of pre and post hospitalization expenses, high sum assured of up to Rs. 50 lakhs, coverage of alternative treatments and a rapid claim settlement process.

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. 

FAQs

  • ✔️Can tax deduction under Section 80TTB be availed for a fixed deposit account?

    Yes. Under Section 80TTB of the Income Tax Act, the deduction is applicable for senior citizens owning savings accounts, fixed deposit accounts and recurring deposit accounts.
  • ✔️How is Section 80TTB relevant for the senior citizens?

    Section 80TTB is reserved especially for senior citizens. If the senior citizens have invested in deposits with the specified entities, they can make the most of their investments by applying for tax deductions of up to Rs. 50,000 under Section 80TTB of the Income Tax Act.
  • ✔️How can non-senior citizens avail of tax deductions?

    Non-senior citizens can avail of tax deductions on interest earned through their savings accounts through Section 80TTA of the Income Tax Act. However, the tax deductions under this section are only limited to Rs. 10,000. If you would like to avail of additional deductions, you can do so through Section 80D of the Income Tax Act. Section 80D offers deductions as high as Rs. 25,000 to those who invest in health insurance.

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