Section 80ttb Deduction

The Budget 2018 has introduced a new Section 80 TTB in the Income Tax Act. The new section offers a tax deduction to assessees in lieu of the existing Section 80TTA deduction. Under Section 80ttb Deduction, senior citizens can claim income tax exemption of upto Rs. 50,000/- on interest income earned. Introduction of Section 80 TTB allows a special benefit to be claimed by senior citizens who are largely dependent on interest income for their post-retirement expenses.

Eligibility for Section 80 TTB Deduction

Section 80 TTB Deduction of the Income Tax Act, 1961 is available only to the senior citizens who are a resident of India. Under the Income Tax Act, senior citizens have been defined as an individual who attains the age of 60 years at any time during the financial year. Non-senior citizens and HUFs are not eligible to avail deduction under section 80 TTB. Also, if the interest income is derived from any deposit held by, or on behalf of, a firm, an association of persons or a body of individuals by a Senior Citizen, the deduction under Section 80 TTB will not be applicable.

Amount of Deduction under Section 80 TTB

Deduction of maximum INR 50,000/- is available on income earned from interest on bank saving deposits, fixed / recurring deposits, interest earned on deposit with co-operative society involved in banking and deposits in the post office. Once deduction is claimed under section 80 TTB, provisions of

Section 80 TTA would not be applicable to senior citizens. Provisions of section 80 TTB is effective from 1st April 2018 i.e. deduction is available to the senior citizens from the financial year 2018-2019. Additionally, in the case of senior citizens, the threshold limit of Tax Deduction at Source (TDS) on interest income has been raised from INR 10,000 to INR 50,000.

Section 80 TTB vs Section 80TTA

Section 80ttb Deduction will replace Section 80TTA deduction from 1st April 2018. The difference between 80TTA and 80TTB deduction is as follows:

Particulars	Section 80TTA	Section 80TTB
Deduction on interest income of Senior Citizens	Maximum deduction of upto Rs.10000/- for saving account interest	Maximum deduction of upto Rs.50,000/- for fixed deposits and saving interest

Section 80 TTB of the Income Tax Act

80TTB. (1) Where the gross total income of an assessee, being a senior citizen, includes any income 
by way of interest on deposits with—
(a) a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies 
(including any bank or banking institution referred to in section 51 of that Act);
(b) a co-operative society engaged in carrying on the business of banking 
(including a co-operative land mortgage bank or a co-operative land development bank); or
 (c) a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),
there shall, in accordance with and subject to the provisions of this section, be allowed, 
in computing the total income of the assessee, a deduction—
(i) in a case where the amount of such income does not exceed in the aggregate fifty thousand rupees, 
the whole of such amount; and
(ii) in any other case, fifty thousand rupees.
(2) Where the income referred to in sub-section (1) is derived from any deposit held by, 
or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed 
under this section in respect of such income in computing the total income of any partner of the firm or 
any member of the association or any individual of the body.
Explanation.—For the purposes of this section, "senior citizen" means an individual resident in India 
who is of the age of sixty years or more at any time during the relevant previous year.

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Frequently Asked Questions

Common questions about Section 80TTB Deduction for Senior Citizens' Interest Income.

The Section 80TTB deduction is available only to senior citizens who are residents of India. Non-senior citizens and Hindu Undivided Families (HUFs) are not eligible for this deduction.

Under Section 80TTB, senior citizens can claim a deduction of up to Rs. 50,000 on interest income earned from deposits with banks, cooperative societies engaged in banking, and post offices.

For the purposes of Section 80TTB, a senior citizen is defined as an individual resident in India who is of the age of 60 years or more at any time during the relevant previous year.

No, the Section 80TTB deduction can only be claimed on interest income earned from deposits with banks, cooperative societies engaged in banking, and post offices. Interest income from other sources is not eligible for this deduction.

No, the Section 80TTB deduction cannot be claimed if the interest income is derived from any deposit held by, or on behalf of, a firm, an association of persons, or a body of individuals.

No, once the Section 80TTB deduction is claimed by a senior citizen, the provisions of Section 80TTA (which allows a deduction of up to Rs. 10,000 on interest income from savings accounts) will not be applicable.

The Section 80TTB deduction is effective from the financial year 2018-2019, starting from April 1, 2018.

For senior citizens, the threshold limit for Tax Deduction at Source (TDS) on interest income has been raised from Rs. 10,000 to Rs. 50,000.

Section 80TTA allows a maximum deduction of up to Rs. 10,000 on interest income from savings accounts for all individuals. Section 80TTB, on the other hand, is specifically for senior citizens and allows a higher deduction of up to Rs. 50,000 on interest income from fixed deposits, savings accounts, and other eligible deposits.

No, the Section 80TTB deduction is available only to senior citizens who are residents of India. Non-resident senior citizens are not eligible for this deduction.