Section 80TTB for Senior Citizens - Deductions and Eligibility

Paying income tax is compulsory by law in India and all those who belong to the specific tax brackets are liable to pay income tax accordingly. However, there are many provisions provided by the government to decrease tax burden on the taxpayer. These provisions help in reducing taxable income for specific incomes and thus resulting in a reduced tax outgo.One such provision specifically aimed at senior citizens is Section 80TTB. Section 80TTB provides tax relief of up to Rs. 50,000 for senior citizens above the age of 60 years. Such individuals can avail a deduction of up to Rs, 50,000 for interest income earned on fixed deposits or savings accounts in a bank or post office.

• Section 80TTB is only applicable to senior citizens above the age of 60 years.
• The tax deduction is allowed only for an amount of Rs. 50,000 or below.
• The tax deduction under Section 80TTB is only reserved for interest income earned on fixed deposits , savings accounts in a bank or post office.

The amount of deduction under Section 80TTB is limited at Rs. 50,000. However, deductions can be made for multiple savings accounts or fixed deposits as long as the total deduction is below Rs. 50,000.

Only the following criteria of people are eligible for deductions under Section 80TTB:

• Citizens above the age of 60 years (senior citizens)
• Those senior citizens must be Indian Residents. NRIs cannot avail this deduction.
• Those senior citizens having savings accounts,fixed deposits or recurring deposits in post offices or a co-operative bank are eligible for this deduction.

You can easily calculate your deduction under Section 80TTB when filing your IT returns. First find out your interest earned on savings accounts, fixed deposits, recurring deposits etc for a particular financial year. You must put in these details in the ‘Income from other sources’ heading. Under deductions, you can choose Section 80TTB and your taxable income calculated will be directly reduced by Rs. 50,000.

Section 80TTB may sound very similar to Section 80TTA as both allow for deductions of interest income. But there are some key differences between the two. Let us look at these differences in detail.

• Section 80TTB is applicable only to senior citizens whereas Section 80TTA is applicable to Individuals as well as Hindu Undivided Families(HUF) .
• Section 80TTB allows for a tax deduction of Rs. 50,000 while Section 80TTA allows for a deduction of only Rs. 10,000.
• Section 80TTB is applicable to interest income earned via savings account, fixed deposits as well as recurring deposits. Section 80TTA, on the other hand, is only applicable for interest earned on savings accounts in banks, post office or co-operative society.
• Yet another difference between the two is related to the resident status of the taxpayer. In case of Section 80TTB, only resident senior citizens are allowed to avail the deduction. Section 80TTA, however, is applicable for NRIs as well.

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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.