Shedding light on Section 80TTB for senior citizens
What's the story
Section 80TTB is a provision in the Income Tax Act of India that provides senior citizens with a significant tax advantage on their interest income.
Under this section, senior citizens can claim a deduction of up to ₹50,000 per year on interest earned from deposits held in banks, post offices, and co-operative societies.
This measure helps alleviate the financial burden on seniors by lowering their taxable income.
Eligibility
Eligibility criteria explained
In order to claim benefits under Section 80TTB, one needs to be a resident senior citizen of India, i.e., 60 years of age or above during the financial year in question.
This deduction is only available on interest income earned from deposits (savings accounts, fixed deposits (FDs), and recurring deposits (RDs) held with banks, post offices, or cooperative societies operating in India.
Deductions
Nature of deductions covered
Senior citizens can claim a deduction up to ₹50,000 every year under Section 80TTB. This limit applies to the total interest income earned from all deposits held across different banks, co-operative banks, or post offices.
And, if the total interest earned is less than ₹50,000 in a financial year, the deduction can be claimed only on the actual amount earned, not the full 50k limit.
Exclusions
Exclusions and limitations
Interest income earned from other instruments like corporate bonds or debentures does not qualify for deductions under Section 80TTB.
Also, if you opt for this benefit, you cannot claim the deduction available under Section 80TTA of the Income Tax Act.
Section 80TTA provides a deduction up to ₹10,000 on interest income but is only applicable to individuals and Hindu Undivided Families below the age of 60.
Claiming process
How to claim the deduction
In order to claim the deduction under Section 80TTB while filing taxes, senior citizens should report their total interest income under the "Income from Other Sources" section of their Income Tax Return (ITR).
They can then claim the deduction under Section 80TTB.
It is recommended for individuals to keep documents like bank statements or passbooks as evidence of their interest income.