Section 80TTB : Interest Deduction on Deposits for Senior Citizens

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Zainab Hawa

Chapter VI-A
IFOS
Section 80TTB
Last updated on January 18th, 2024

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 several tax deductions to benefit senior citizens in India to alleviate some of the challenges they face. Section 80TTB of the 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.

Eligibility to claim deduction u/s 80TTB

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 the Income Tax Act.

However, the following entities cannot claim this deduction:

Furthermore, if the taxpayer is opting into a new tax regime, then they cannot claim a deduction under section 80TTB.

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Threshold limit for 80TTB deduction

A resident senior citizen will be able to claim a deduction of up to INR 50,000 under this section. Hence, 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. However, 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 remaining amounts will be taxable.

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Eligible interests for Deduction u/s 80TTB

The interest income from the following deposits is allowed as a deduction:

However, interest income received from the following deposits is not allowable to claim as a deduction:

Calculation of deduction

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 2023-24:

As per the rule, Mr. Inder will be eligible to claim 80TTB deduction for AY 2023-24 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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Reporting deduction in ITR

Individuals can claim 80TTB deduction while filing an 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 the ITR, firstly, 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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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. Further, the taxpayer should have a fixed deposit certificate, savings bank account statement, post office deposit documents, etc available with them.

Comparison between Section 80TTA and 80TTB

ParametersSection 80TTASection 80TTB
EligibilityIndividuals and HUFs 
(below 60 years)
Only senior citizens
Exemption LimitMaximum INR 10,000 per yearMaximum INR 50,000 per 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

FAQs

Is 80TTB deduction 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 a deduction under section 80TTA?

No, a senior citizen can only claim a deduction of interest income u/s 80TTB.

Can an NRI senior citizen claim a 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 also covered under 80TTB?

Yes, the taxpayer 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 citizens (above the age of 60 years) claim an 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.

  2. For interest income from recurring deposit with a cooperative society (non-agri), can deduction be claimed under section 80TTA ?

  3. Hey @S_Gupta

    Yes, you can claim a deduction under section 80TTA for interest amounts received on recurring deposits from cooperative societies.

    Hope this is helpful!

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