Section 80TTB: Deduction to senior citizens for interest on deposits
Section 80TTB provides an income tax deduction for interest earned on various deposits to senior citizens. For this purpose, the deposits such as savings accounts, fixed and recurring deposits etc should be covered. The deposits can be made with post offices like Senior citizen saving scheme, monthly investment scheme or with banks, financial institutions and cooperative societies like fixed or recurring deposits etc The benefit under this section is only available to a resident Indian and hence NRI cannot avail the benefits of this section. Also, senior citizens are not allowed to take benefit under both the sections i.e. 80TTA and 80TTB. They should choose to avail of the benefits only under section 80TTB.
Who can claim deduction u/s 80TTB?
Non-Resident Indians (NRIs) or resident Indians below the age of 60 years are not allowed to take benefit under section 80TTB. The benefits can only be availed by
Resident Senior Citizen
Aged 60 years or above
Tax Benefit:
The tax benefit of Rs 50,000 extends to all kinds of deposit’s interest, unlike section 80TTA.
Eligibility:
Only the interest earned on savings a/c opened with the following entities are eligible for deduction under section 80TTA:
Bank
Post Office
Financial Institutions
Co-operative Societies
Important Note:
Some important points to be considered in respect of section 80TTB are:
Deduction u/s 80 TTB shall not be available to NRIs.
No Deductions shall be allowed to those below 60 years of age.
This deduction is over and above the limit of Rs 1.5lakh deduction u/s 80C
