Section 80TTB Deduction for Senior Citizens
Seniors' physical and mental health are frequently linked to aging, which has a detrimental effect on their financial situation. As a result, it's essential to provide them with sufficient tax breaks.
In light of this, the government consistently introduces new regulations aimed at making life easier for elderly folks. Numerous advantages have been decided to be included for our older folks in the Finance Budget 2018. One significant change to the 2018 Budget (pertaining to older persons) is the addition of a new section called 80TTB.
Applicability of Section 80TTB
A resident senior citizen who is 60 years of age or older at any point during a Financial Year (FY) may deduct a certain amount from his gross total income for that FY under Section 80TTB. This Section is in effect as of April 1, 2018.
Note: This deduction is only applicable in the event that the person takes advantage of section 115BAC(1A)'s provision allowing them to change out of the default tax regime.
Amount of 80TTB deductions that are available
A deduction from the gross total income of Rs 50,000, or the income amount, whichever is less, is permitted. Any of the following revenue, taken as a whole, is considered income here:
Interest on fixed or savings bank deposits.
Interest earned on deposits made with a co-operative organization that conducts banking, such as a co-operative bank for land development or mortgage.
Post office deposit interest.
Exceptions to Section 80TTB
Assume a partnership business has the given deposits, or someone on its behalf does. In that scenario, neither the partner of such a company nor any member of such an Association of Persons (AOP) or Body of Individuals (BOI) may deduct Section 80TTB from their total income.
Difference between Section 80TTA and Section 80TTB
| Particulars |
Section 80TTA |
Section 80TTB |
| Applicability |
Applicable to individuals and HUF except for senior citizens |
Applicable to senior citizens |
| Specified income |
Interest on savings account only |
Interest on all kinds of deposits |
| Quantum of deduction |
Up to Rs 10,000 |
|
Illustration on tax savings by senior citizens
Compared to regular taxpayers, senior citizens already benefit from a larger basic exemption ceiling. Thanks to the implementation of Section 80TTB, seniors can now save even more on taxes.
Using the following example, let's see how. Let's look at the following taxpayer incomes:
Savings interest of Rs 5,000
Interest on fixed deposits of Rs 2,00,000
Other income of Rs 1,50,000
Now, the following table will explain how the requirements of Section 80TTB will benefit a senior citizen (as opposed to a regular taxpayer).
Computation of Taxable Income
| Particulars |
Non-Senior Citizen (Rs) |
Senior Citizen (Rs) |
| Savings Interest |
5,000 |
5,000 |
| FD Interest |
2,00,000 |
2,00,000 |
| Other Income |
1,50,000 |
1,50,000 |
| Gross Total Income |
3,55,000 |
3,55,000 |
| Less: Deduction under Section 80TTA |
5,000 |
N/A |
| Less: Deduction under Section 80TTB |
N/A |
5,000 |
| Taxable income |
3,50,000 |
3,05,000 |
A non-senior citizen in the aforementioned case is only eligible for a Rs 5,000 savings interest deduction under Section 80TTA. On the other hand, older citizens cannot deduct interest on fixed deposits and savings accounts up to Rs 50,000.
Documents Needed
There are no unique conditions to qualify for Section 80TTB deductions. Your PAN, interest certificate, and bank statement are adequate for computing taxes.
Conclusion
By altering Section 80TTA, Section 80TTB is established specifically for older folks. It offers a substantial tax reduction for senior adults who invest largely in bank accounts and earn income from interest on their deposits. However, the deduction under this Section will not apply to any income received from other sources, such as interest on bonds and debentures.
FAQs
Yes, you may deduct interest on savings and bank deposit accounts under Section 80TTB, however you can only deduct up to Rs 50,000 in total.
You must file your income tax return in order to claim the deduction under Section 80TTB. Before claiming the Section 80TTB deduction, interest income from savings, recurring accounts, and deposits must first be reported in your income under the heading "Income from other sources."
Indeed, for AY 2024–2025, the Section 80TTB deduction is valid.
Yes, citizens over 60 are covered by this clause. Thus, both super senior citizens and senior citizens are included in this.
No, you are unable to claimBot 80TTA and 80TTB at the same time.
No, under the current system, you are unable to claim a deduction under section 80TTB.
