Section 80 TTB - Interest Deduction for Senior Citizens

Roshni Bhagtani

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Section 80 TTB - Interest Deduction for Senior Citizens

Since old age is often associated with illness and financial turmoil, the government of India decided to provide relief in taxation with the introduction of this recent deduction.

The inclusion of section - 80 TTB in the 2018 finance budget was a significant amendment. In this article, we will cover every aspect of section 80 TTB.

Eligibility for claiming deduction

According to the income tax act, the eligibility for claiming deduction

❖ An individual must be a resident of India 

❖ An individual must be a senior citizen i.e, age of 60 years or above according to the provisions. 

❖ Taxpayer filing under the category of senior citizens. 

Amount of deduction allowed under section 80 TTB

The amount of deduction allowed under Section 80 TTB for interest income is up to 50,000 per year.

The deduction amount is aggregate for the following interest

● Interest income on a savings account, fixed deposits, and recurring deposits.

● Interest income on post office deposits.

● Interest on deposits is held with a cooperative society that is engaged in providing baking services including a co-operative land mortgage bank or a co-operative land development bank.

● All the accounts must be held by the assessee to be eligible for the deduction.

Some of the exceptions under section 80 TTB

Individual and HUF (Hindu Undivided Family) other than senior citizens cannot avail deduction under section 80 TTB. According to the rule, senior citizens must hold bank deposits accounts; if the income on the interest generated from deposits held by or on behalf of a partnership firm, an association of persons (AOP), or a body of individuals (BOI) then that income will be taxable and not be eligible to for deduction under section 80 TTB.

Section 80 TTA vs Section 80 TTB

Although section 80 TTA and section 80 TTB have very similar types of deduction, they are yet very different.

Let’s see some of the differences :3.PNG

Let’s understand with an example how to claim your deduction under section 80 TTB?

Senior citizens already have a higher exemption limit, and the addition of 80 TTB helps with even more tax savings. Mr. S who is a taxpayer and a resident senior citizen earns an annual income of Rs. 6,00,000. He also earns the following incomes:

● Interest income on fixed deposits of Rs. 25,000 ● Interest income on savings account and recurring deposits Rs. 6,000 and 8,000 respectively. ● Interest income from bonds Rs. 5,000 ● Interest income held on behalf of partnership firm Rs. 10,000.

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We hope this blog has given you the required knowledge of some key factors one should know before getting started with your Income Tax filing.