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 INR 50,000. This section is applicable from FY 2018-19 (AY 2019-20) onwards. For earlier years deduction was allowed under section 80TTA.

Deduction under section 80TTB is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
Tip
Deduction under section 80TTB is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime

Who can Claim Deduction Under Section 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 under section 80TTB. An NRI senior citizen cannot claim deduction u/s 80TTB.

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What is the Deduction Limit Under Section 80TTB?

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

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Which Interests are Eligible for Deduction Under Section 80TTB?

The deduction is allowed on interest earned from following deposits:

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

Example

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 INR 50,000.

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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.

ITR for Pensioners
CA Assisted Income Tax Return filing for individual senior citizens receiving pension income.
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ITR for Pensioners
CA Assisted Income Tax Return filing for individual senior citizens receiving pension income.
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ITR Form Applicable for Section 80TTB

The taxpayer can claim deductions u/s 80TTB while filing ITR if all the above-mentioned conditions are full-filled. Individuals/HUFs can claim 80TTA in any of the ITR forms, i.e, ITR 1ITR 2ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.

For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.
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For FY 2019-20, due to COVID-19 the due date for filing ITR has been extended to 30th November 2020 for all taxpayer.

Supporting Documents

This tax deduction is accessible by all HUFs and individuals. The document required apart from the common documents such as Form 16 is of the savings account bank statement is enough to calculate your interest in income and tax deductions on incomes.

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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 INR 50,000 pa.

  • Harish Desai. says:

    Whether interest on FD with Houseing Development finance Ltd. is covered u/s 80ttb ?

    • Hiral Vakil says:

      Hi Harish,

      Any interest on FD made with Banking company to whom banking regulations act applies or a co-operative society engaged in carrying on the business of banking are eligible for deduction u/s 80TTB. Hence deduction can be claimed on FD Interest if Houseing Development finance Ltd falls under any of the above categories.

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