Deduction under section 80TTB
Deduction under section 80TTB in respect of interest income on deposits from a savings bank account for senior citizens was introduced in the Finance Bill, 2018 w.e.f 1 April 2018. This section provides relief that interest income up to Rs. 50,000/- will not be charged to tax.
Details of the section
|Section 80TTB||Deduction in respect of interest on deposits in case of senior citizens.|
|Eligible Assessee||Senior Citizens|
|Maximum deduction||Rs. 50,000/-|
Note: Deduction under this section will be available only to resident individuals who are 60 years of age or above.
Conditions to avail the deduction
Interest income should be earned from
- A savings account with a BANK
- A savings account with a CO-OPERATIVE BANK
- A savings account with a POST OFFICE
Note: Interest income derived by keeping deposits with companies, firms, or Non-Banking Finance Companies (NBFCs) will not be eligible for deduction under this section.
To claim the deduction one needs to first show the interest income under the head “Income from Other Sources” and then claim the deduction under section 80TTB.
What is the amount of maximum deduction allowed under this section 80TTB?
The maximum deduction available while computing the total income of the assessee will be
- Rs. 50,000/- or
- Amount of such interest income
whichever is lower.
Note: Total interest income derived from deposits from all the specified institutions shall be taken into account.
Can an individual who is not a senior citizen claim deduction in respect of interest on deposits in savings account under section 80TTB?
Is it possible to claim a deduction for interest from fixed deposits/recurring deposits/term deposits under section 80TTB?
YES. Interest income earned from all kinds of deposits will be eligible for deduction under section 80TTB. There is no specific exclusion of interest from term deposits like in section 80TTA.
Hence, interest income earned from fixed deposits/recurring deposits/term deposits will be eligible for deduction under section 80TTB.
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