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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 2019-20. It is applicable to resident senior citizens only.

Section 80TTB - Income Tax Deduction for Senior Citizens

Who is eligible for income tax deduction under 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 income tax deduction under Section 80TTB?

The following persons are not eligible to claim deduction under section 80TTB –

  1. Tax payers under the age of 60 Years
  2. Non-resident
  3. HUF
  4. 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 –

  1. Interest on bank deposits
  2. Interest on post office deposits
  3. 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

Particulars Section 80TTA Section 80TTB
Meaning Section 80TTA 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 Section 80TTA.

For ex – Mr. Arun is 64 Years old and his interest income is given below –

  • Savings interest of Rs.20000
  • Interest on FD of Rs.90000
  • Other income Of Rs.220000
Particulars Financial year 2017-18 Financial year 2018-19
Savings interest 20,000 20,000
FD interest 90,000 90,000
Other income 2,20,000 2,20,000
Gross total income 3,30,000 3,30,000
Less – Deduction u/s 80TTA 10,000 Not applicable
Less – Deduction u/s 80TTB 50,000 40,000
Taxable income 3,20,000 2,80,000

Note: For the AY 2020-21, the rebate under section 87A is available up to Rs 12,500 (for a total income up to Rs. 5,00,000).

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