The government aims at securing the future of all the individuals, including the senior citizens. Therefore, in line with this duty, certain deductions are provided to individuals as well as senior citizens through the Income Tax Act. The individuals aged below 60 years are provided deductions under Section 80TTA and the senior citizens, aged 60 years and above through Section 80TTB.
What is Section 80TTB?
Section 80TTB was introduced in the Income Tax Act through the Union Budget, 2018 and is applicable from the Financial Year 2018-2019. Through this provision, the citizens can claim a specified amount as a deduction from their respective gross total income.
Also Read: 10 Ways To Save Your Taxes!
Who Can Claim Deductions Under Section 80TTB?
Section 80TTB is applicable on the resident senior citizens, who is at any time of the relevant Financial Year is of the age 60 years and above. Therefore, only the senior citizens can claim the deductions under this Section.
Who Cannot Claim Deductions Under Section 80TTB?
Deductions under Section 80TTB is applicable only on resident individuals. Following are the persons who cannot claim deductions under this Section:
- Non-senior citizens (aged below 60 years)
- Non resident senior citizens
- HUFs.
- Senior citizens having interest income from the deposit held by, or on behalf of a firm, an Association of Persons (AOP) or a Body of Individuals (BOI).
Where Should You Invest To Claim Deduction Under Section 80TTB?
Following are the incomes, wherein you can claim deduction under Section 80TTB:
- Interest on bank deposits (savings or fixed);
- Interest on deposits held in a co-operative society engaged in the business of banking, including a co-operative land mortgage bank or a co-operative land development bank; or
- Interest on post office deposits.
- If there are more than one account, then also maximum deduction in total is upto Rs. 50,000.
Also Read: Section 80G: Deductions On Donations
How Much Deduction Can Be Availed Under Section 80TTB?
The senior citizens can claim a deduction of up to the amount of the interest or Rs. 50,000, whichever is lower.
Note:
This deduction is exclusive of the deduction of Rs. 1.5 lacs available under Section 80C and its allied sections.
What was the need of inserting Section 80TTB when Section 80TTA was already introduced?
The deductions available under Section 80TTB is similar to the deductions available under Section 80TTA. However, under Section 80TTA, deductions are available on interest amount of only savings account in bank / post office / co-operative banks from the gross total income of the individual taxpayer or a HUF up to Rs 10,000. The difference between these two provisions can be well understood through the following table:
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Deductions under Section 80TTB can only be claimed by resident senior citizens. Therefore, NRI cannot claim deduction under Section 80TTB.
The deduction under Section 80TTB is available only under Old Tax Regime.
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