Section 80TTB : Interest Deduction on Deposits for Senior Citizens

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Zainab Hawa

Chapter VI-A
IFOS
Section 80TTB
Last updated on February 14th, 2023

Senior citizens are an important part of Indian Society. From the high cost of medical treatment to the lack of financial security they are greatly affected by the way taxes are imposed. Because of this, the government has introduced a number of tax deductions to benefit senior citizens in India to alleviate some of the challenges they face. Section 80TTB of income tax act 1961 is one such deduction that was introduced in the budget 2018. This section is applicable from FY 2018-19 (AY 2019-20) onwards.

Who can claim 80TTB deduction?

Any resident individual who has attained the age of 60 years or more can claim a deduction on interest income up to INR 50,000 under section 80TTB of income tax act.

However, the following entities cannot claim this deduction:

Furthermore, from AY 21-22, if the taxpayer opts for a new tax regime, they cannot claim a deduction under section 80TTB of income tax act.

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What is the threshold for 80TTB deduction?

As discussed formerly, a resident senior citizen will be able to claim a deduction of up to INR 50,000 under this section.

If the interest earned from the deposit is less than INR 50,000 then the whole would be allowed as a deduction under section 80TTB. But if the interest earned from the deposit is more than INR 50,000 then a maximum of INR 50,000 is allowed as a deduction & the rest will be taxable.

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Which Interests are Eligible for Deduction Under Section 80TTB?

The deduction is allowed on interest earned from the following deposits:

The deduction is disallowed on interest earned from the following deposits:

How is the Deduction Calculated Under Section 80TTB?

In order to understand the calculations better, let us take an example;

Mr Inder is a resident senior citizen. And he has earned the following income during the AY 2022-23:

As per the rule, Mr. Inder will be eligible for 80TTB deduction for AY 2022-23 only on interest from Bank FD and SCSS.

Calculation of total taxable interest:

Particulars Amount
Bank FD interest26,000
SCSS interest32,000
Debenture Interest3,500
Total Interest Income61,500
Total Interest Income Exemption u/s 80TTB50,000
Total Taxable Interest11,500

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How to Claim Interest Deduction?

Individuals/HUFs can claim 80TTB deduction while filing ITR if all the above-mentioned conditions are fulfilled. The taxpayer can claim the deduction in any of the ITR forms, i.e, ITR 1ITR 2ITR 3, and ITR 4 depending upon their income sources.

While filing ITR, first, you need to add total interest earned as income under the head “Income From Other Source”. Then enter the eligible amount as a deduction under Chapter VI-A.

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What are the supporting documents required?

While claiming the deduction, you need not submit any proof while filing the ITR. However, for tax computation purposes, bank statements or interest certificates are sufficient.

Comparison between Section 80TTA and 80TTB

ParametersSection 80TTASection 80TTB
EligibilityIndividuals and HUFs 
(below 60 years)
Only senior citizens
Exemption LimitMaximum INR 10,000 a yearMaximum INR 50,000 a year
Specified incomeDeduction on interest from the savings account onlyDeduction on interest from all kinds of deposits
Applicability for NRI’sNRI who have a savings account (NRO) can claim a deduction u/s 80TTANRI’s are not eligible to claim deductions under 80TTB
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FAQs

Is the deduction that is available under section 80TTB over and above the deduction available under section 80C?

Yes, the deduction of INR 50,000 under section 80TTB is available over and above the deduction of INR 1,50,000 available under section 80C.

Can a senior citizen claim deduction under section 80TTA?

No. From FY 2018-19 onwards, resident senior citizens can only claim a deduction on interest under section 80TTB of income tax act. However, for earlier financial years deduction on interest income can be claimed under section 80TTA.

Can an NRI senior citizen claim deduction under section 80TTB?

No, an NRI senior citizen can not claim a deduction under this section. However, they can claim a deduction on interest from a savings account under section 80TTA.

Are FDs and RDs covered under 80TTB?

Yes, you can claim a deduction for interest earned from RD and FD and some more specific deposits up to INR 50,000 per annum.

Can super senior citizen (above age of 60 years) claim 80TTB deduction?

Yes, 80TTB deduction can be claimed by any individual or HUF above the age of 60 years. Hence, it includes senior citizens as well as super senior citizens.

Got Questions? Ask Away!

  1. Hi @Swapnil_Agarwal,

    Yes, an NRI holding an NRO account can claim a deduction on saving bank account interest under section 80TTA.

    Hope it helps.