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Income tax can be like a liability for many, especially for families with just one earning member and senior citizens. Hence, the Income Tax Act, 1961 also offers a range of deductions and exemptions to reduce your tax burden. This article will explore the financial relief provided to senior citizens under Section 80TTB. This section was introduced to help them lead a serene and peaceful life. Let’s dive in to understand Section 80TTB in detail!

What is Section 80TTB?

According to Section 80TTB of the Income Tax Act, people over the age of 60 are eligible to avail tax deductions up to ₹50,000. This 80TTB deduction is applicable to the interest income earned during a particular financial year. In other words, Section 80TTB of the Income Tax Act is a provision where a taxpayer can claim a deduction from their total gross income for a particular financial year.


Section 80TTB was introduced in the Finance Budget 2018 and came into effect on April 1, 2018. A senior citizen can claim a deduction amount lower than ₹50,000. Here is a glance into the details about the deductions applicable under Section 80TTB and its terms and conditions.

Applicability of Section 80TTB Deductions for Senior Citizens

There are various terms and conditions applicable to avail tax deductions under Section 80TTB of the Income Tax Act. Given below is a list of them:


  1. The exemption in tax is limited up to ₹50,000 for a year on the interest income earned.

  2. Only citizens more than 60 years of age can claim the 80TTB deductions.

  3. Those senior citizens who own a fixed deposit or savings account at banks, co-operative banks and post offices, thereby earning interest from such deposits and accounts, qualify for the deduction under Section 80TTB.

Section 80TTB: What is the Eligibility Criteria?

People falling under the following categories are eligible for Section 80TTB deductions:


  1. Taxpayers under the category of senior citizens (people aged above 60 years)

  2. Residents of India

  3. Senior citizens who own a savings account, fixed deposit account, recurring deposit account

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

Types of Income Eligible Section 80TTB Deduction

Deductions under Section 80TTB is applicable for only certain types of income. They are:


  • Interests earned on deposits (fixed deposit as well as savings bank account) with a banking institution. Here, a banking company is an institution that’s mentioned under the Banking Regulation Act, 1949 (10 of 1949).

  • Interests earned on deposits held with a co-operative society. However, this co-operative society must be involved in the banking business.

  • Interests earned on deposits held with a post office. This post office must meet the definition of a post office as mentioned in clause (k) of Section 2 in the Indian Post Office Act, 1898 (6 of 1898).

Exceptions under Section 80TTB

Section 80TTB also comes with certain limitations. Below is a list of those:


  1. Suppose the interest income from a savings account is owned specifically by an Associate of Persons (AOP), a firm or a body of individuals (BOI). In that case, Section 80TTB deduction will not be applicable for the partner of such firms or a member of AOP or BOI.

  2. Individuals and Hindu Undivided Families, apart from senior citizens, cannot avail the tax deductions under Section 80TTB.

  3. Non-resident Indians (NRIs) are also not eligible for the 80TTB deductions.

Amount of Deduction Under Section 80TTB

The maximum amount of deduction applicable under Section 80TTB of the Income Tax Act is the lower of the following:


  • ₹50,000 interest income

  • The total amount of interest income during the financial year

For example, if the interest earned during the financial year is ₹45,000, you are eligible for an income tax deduction of ₹45,000 and not ₹50,000. However, if the total interest income is ₹60,000, your Section 80TTB deduction amount would be ₹50,000.

How to Calculate Deduction Under Section 80TTB of the Income Tax Act?

To calculate your Section 80TTB deduction, you need to reduce your eligible interest income amount from your total income. However, please note that this deduction is capped at ₹50,000. So, if your total interest income from banking institutions, co-operative societies (involved in the business of banking), and post office exceeds this amount, you can only deduct ₹50,000.


With the introduction of Section 80TTB, senior citizens now enjoy more tax savings. Here is a look at an example of Section 80TTB of the Income Tax Act that will help you understand it better. Let’s consider the following incomes for a normal taxpayer:


  • Savings interest of ₹5000

  • Interest on fixed deposit ₹2,00,000

  • Other income of ₹1,50,000

The table below shows how a senior citizen will benefit from the 80TTB deduction. This table compares the incomes of a normal taxpayer given above.


Normal Taxpayer

Senior Citizen

Savings interest



FD interest



Other income



Gross total income



Less: Deduction under Section 80TTB

Not Applicable


Taxable income



Tax (before 87A rebate)



Less: Rebate under Section 87A



Tax payable including cess @ 4%



Differences between Section 80TTA and Section 80TTB

Section 80TTA provides taxpayers similar deductions like Section 80TTB of the Income Tax Act. However, there are some key differences between 80TTA and 80TTB deductions. Section 80TTA provides a deduction on the interest earned only through savings accounts from a bank, cooperative bank or a post office.


This interest is calculated from the total gross income of the individual taxpayer or a Hindu Undivided Family. Deductions of up to ₹10,000 are given under 80TTA. However, 80TTB provides deductions on all kinds of deposits, and the limit is ₹50,000. As 80TTB was introduced in the year 2018 exclusively for senior citizens of India, deductions offered by Section 80TTA are not available to senior citizens. The table below will give a better understanding of the key differences between Sections 80TTA and 80TTB.


Section 80TTA

Section 80TTB


Availed by individuals and HUF who are not senior citizens

Availed by senior citizens only

Income specified

Interest earned through savings account only

Interest earned on all kinds of deposits like a savings bank account, fixed deposit account, recurring deposit account, etc.

Deduction limit

Up to ₹10,000

Up to ₹50,000


NRIs with NRO account are eligible

Only Indian citizens are eligible


Section 80TTB has proved to be a boon for all the senior citizen taxpayers in India. It provides focused financial aid to the entities as it segregates them from Section 80TTA. Therefore, Section 80TTB becomes a lucrative avenue for all the senior citizen taxpayers who want to avail tax benefits.


  • ✔️Does FD income come under Section 80TTB deduction?

     Yes, interest earned through bank deposits, be it savings account or fixed deposit account, is eligible for the Section 80TTB deduction. The maximum limit of deduction is ₹50,000.

  • ✔️How much interest is tax-free for senior citizens?

     Those senior citizens who are residents of India are eligible to pay no tax on their interest earned up to ₹50,000 in a financial year. The amount of interest earned over ₹50,000 will attract tax as per the slab rate of the senior citizens.

  • ✔️What is the age limit for availing deduction under Section 80TTB?

     All taxpaying citizens over the age of 60 are eligible to avail Section 80TTB deductions.

  • ✔️How can I claim deduction under Section 80TTB?

     You can claim 80TTB deductions by filing your Income Tax Return. All the applicable incomes should be included there and then the deductions under 80TTB can be claimed.  

  • ✔️What is Section 80TTB?

    Section 80TTB of the Income Tax Act offers tax relief to resident senior citizens on certain types of income. These include interests earned via a bank, a co-operative society involved in banking services, and a post office.

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