Section 80TTB: Interest Deduction on deposits for Senior Citizens

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Hiral Vakil

Chapter VI-A
IFOS
Section 80TTB

Budget 2018 introduced a new section 80TTB under the Income Tax Act which allows resident senior citizens to claim a deduction on interest income up to Rs. 50,000. This section is applicable from FY 2018-19 (AY 2019-20) onwards. For earlier years deduction was allowed under section 80TTA.

Want to know about more tax saving investments?
Read about the different deductions you are eligible to claim and how to claim them.
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Want to know about more tax saving investments?
Read about the different deductions you are eligible to claim and how to claim them.
Read More

Who can claim deduction u/s 80TTB?

This section is introduced to give more benefits to senior citizens of India. Any resident individual who has attained the age of 60 years or more during FY 2018-19 can claim deduction u/s 80TTB. An NRI senior citizen cannot claim deduction u/s 80TTB.

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Residential Status Calculator for Income Tax. Taxability in India depends on residential status. Know your residential status from Resident, NRI, Resident but Not Ordinarily Resident(RNOR)
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What is the deduction limit u/s 80TTB?

A resident senior citizen will be able to claim deduction up to Rs. 50,000 under this section. If interest earned from the specific deposit is less than Rs. 50,000 the same would be allowed as deduction u/s 80TTB. But if interest earned from the specific deposit is more than Rs. 50,000 then maximum Rs. 50,000 is allowed as a deduction.

Which interests are eligible for deduction u/s 80TTB?

The deduction is allowed on interest earned from following deposits:

Deduction under section 80TTB is not allowed on following deposits:

Let’s take an example to understand it better: Mr. Inder is a resident senior citizen. And he has earned the following income during the FY 2018-19:

Deduction under section 80TTB is available only on interest from Bank FD and SCSS. And eligible deduction under section 80TTB is Rs. 50,000.

How to claim deduction u/s 80TTB?

You can claim a deduction by filing your ITR. First, you need to add total interest earned as income under the head “Income From Other Source”. And then enter the same amount as a deduction under Chapter VI-A.

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FAQs

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

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

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 80TTB. However, for earlier financial years deduction on interest income can be claimed 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 Rs. 50,000 pa.

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