What Is Section 80TTB?
Section 80TTB is a provision made by the government for taxpayer’s who are resident senior citizen’s having age of 60 years or more are eligible to claim maximum tax relief of Rs.50000 on income earned on savings & fixed deposits in a financial year. This section is applicable from financial year 2018-19. It is applicable to resident senior citizens only.
Who Is Eligible For Section 80TTB?
Senior citizens who are resident of India & holding the fixed deposits with banks, co-operative banks & post offices and earning income from these sources are eligible to claim deduction under section 80TTB.
Who Is Not Eligible For Section 80TTB?
The following persons are not eligible to claim deduction under section 80TTB –
- Tax payers under the age of 60 Years
- Firms, body of individual or association of persons.
Claiming Deductions U/S 80TTB
The maximum deduction allowed under section 80TTB is Rs.50000. Any resident senior citizen can claim this deduction on the income earned by them from the following sources –
- Interest on bank deposits
- Interest on post office deposits
- Interest on deposits held in a co-operative society involved in banking business. For ex – Co-operative land mortgage bank or land development bank.
Difference Between Section 80TTA & Section TTB
|Meaning||Section80TTA offers a deduction of Rs.10000 on interest earned by an individual on his or her savings account.||Section 80TTB offers a deduction of Rs.50000 on interest earned by any resident senior citizen on all savings and fixed deposits.|
|Amount of deduction||Rs.10000||Rs.50000|
|Eligibility||Resident individual, HUF||Resident senior citizen only|
|Specified income||Interest income earned on savings account only||Interest income earned from bank, co-operative banks and post offices on all types of deposits.|
|Not eligible||Non-resident, Firm, association of persons, Body of individuals.||Resident not senior citizen, Non-resident, HUF, Firm, association of persons, body of individuals.|
Example – Let us take an example that how a senior citizen can save income tax after introduction of section 80TTB in comparison with 80TTA.
For ex – Mr. Arun is 64 Years old and his interest income is given below –
|Particulars||Financial year 2017-18||Financial year 2018-19|
|Gross total income||3,30,000||3,30,000|
|Less – Deduction u/s 80TTA||10,000||Not applicable|
|Less – Deduction u/s80TTB||Not applicable||50,000|
As you are seeing above, After taking deduction under section 80TTA, Mr. Arun taxable income for financial year 2017-18 is Rs.320000 in which amount above Rs.300000 i.e. Rs.20000 is taxable under the tax laws but if you take the second situation, Mr. Arun save his tax as his taxable income is Rs.280000 and he is not even in the tax bracket. Therefore, Section 80TTB is very useful for the resident senior citizens and they can save much of their taxes.