Section 80TTB Deduction for Senior Citizens
Section 80TTB of the Income Tax Act allows senior citizens to enjoy certain deductions. The Government of India in 2018 to help senior citizens save a bit more introduced the Section 80TTB of the Income Tax Act.
Section 80TTB Applicability
A taxpayer who is 60 years of age or older at any point during a Financial Year (FY) may deduct a certain amount from their gross total income for that FY under Section 80TTB. This section came into effect on 1 April 2018.
The amount of deductions allowed by Section 80TTB
From the gross total income, a deduction of Rs.50,000 or the income amount, whichever is lesser, is permitted. Income here can be defined as any combination of the following:
- Interest earned on fixed or savings bank deposits.
- Deposit interest earned at cooperative societies that are in the banking sector, such as cooperative land mortgage banks or cooperative land development banks.
- Interest earned on deposits made to a post office scheme.
Section 80TTB Exceptions
However, there are certain exceptions under Section 80TTB. If the deposit is made in the name of certain groups, then Section 80TTB is not applicable. These groups can be:
- A partnership firm
- Body of individuals
- An association of persons
Other than seniors, a variety of people can take advantage of tax breaks and recoup taxes paid in advance. Hindu Undivided Families (HUFs), non-resident Indians, and alternative income obtained from savings accounts owned by organisations like associations of people, confederations of people, and businesses are among these entities.
Section 80TTA and Section 80TTB Differences
There are certain differences between Section 80TTA and Section 80TTB. They are given below:
Category | Section 80TTA | Section 80TTB |
Income specified | Interest accrued on savings account | Interest accrued on any kind of deposits |
Deductions allowed | Up to Rs.10,000 | Up to Rs.50,000 |
Applicability | Deductions can be availed by people below the age of 60 years and those belonging to HUF groups | Deductions can be availed only by senior citizens and those above the age of 60 years |
Example Showing How Section 80TTB Deduction Works
Given below in the table are the details to help you understand how you can avail deductions under Section 80TTB in a better manner.
- Returns from fixed deposit (FD): Rs.23,000
- Returns from Savings Account: Rs.3,000
- Returns from recurring deposit (RD): Rs.25,500
- Returns from bonds: Rs.2,000
Interest Returns Income | Taxability | Amount | Amount |
Interest on fixed deposit | NA | Rs.23,000 | NA |
Returns from deposits made to a savings account | NA | Rs.3,000 | NA |
Returns from a recurring deposit | NA | Rs.25,500 | NA |
Total Interest Income Exemption | NA | NA | Rs.50,000 |
Taxable Total Interest Return | Taxable | NA | Rs.1,500 |
Returns From Bonds | Taxable | - | Rs.2,000 |
Total Returns on Taxable Interest | - | - | Rs.20,500 |
Tax Benefit for Senior Citizens under Section 80TTB illustration
Given below in the table is the illustration to show the deductions a senior citizen can enjoy under Section 80TTB:
- Interest from FD: Rs.2 lakh
- Income from alternate source: Rs.1.5 lakh
- Savings interest: Rs.5,000
Particulars | Senior Citizens | Non-senior Citizens |
Interest from fixed deposit | Rs.2 lakh | Rs.2 lakh |
Interest from savings account Interest | Rs.5,000 | Rs.5,000 |
Alternate income | Rs.1.5 lakh | Rs.1.5 lakh |
Gross income | Rs.3.55 lakh | Rs.3.55 lakh |
Deductions under Section 80TTB | - | Rs.5,000 |
Deductions under Section 80TTA | Rs.50,000 | - |
Total amount taxable | Rs.3,05,000 | Rs.3,50,000 |
Documents Required
Given below are the list of documents you will need to submit to avail deductions under Section 80TTB:
- Bank documents such as your passbook, bank statement, etc.
FAQs on Section 80TTB
- How do I submit a Section 80TTB deduction request?
By submitting your income tax return, you can make a deduction claim under Section 80TTB. Prior to claiming a Section 80TTB deduction, the income must first be included in your income under the heading ‘Income from other sources.
- Is the 80TTB deduction valid for the AY 2024–2025?
Yes, the Section 80TTB deduction applies to the AY 2024–2025 period.
- I am a senior citizen, aged 68 years, with a savings account earning Rs.11,000 and Rs 61,000 in interest from nationalised bank fixed deposits. Is Section 80TTB applicable to my deduction request?
Yes, you can deduct Section 80TTB interest from savings and deposit accounts with banks. However, the total amount that can be deducted is just Rs.50,000.
- Does Section 80TTB apply to people who are considered super senior citizens?
Yes, citizens who are considered super senior citizens are also covered by this section. Consequently, term refers to both senior citizens and extremely senior citizens.
- For older citizens, is interest income from fixed deposits taxable?
Yes, interest income from FDs is taxable. Senior citizens may, however, deduct expenses under Section 80TTB.
- Are NRI and NRO accounts eligible for deductions under Section 80TTB?
No NRI and NRO accounts are not eligible for deductions under Section 80TTB.
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