Section 80TTB

Many seniors face health challenges that can impact their financial well-being. To address this, the government introduced Section 80TTB in the 2018 budget. Section 80TTB provides tax breaks on certain types of income, reflecting the government's ongoing commitment to supporting and improving the lives of senior citizens.
 

What is Section 80TTB?

Section 80TTB of the Income Tax Act is designed specifically for senior citizens. This section allows them to claim a deduction of up to Rs. 50,000 on interest income earned from several types of deposits. These deposits can be held with banks, co-operative societies engaged in banking business, and post offices. It is important to note that this deduction applies only to the interest earned, not the entire principal amount deposited. Section 80TTB offers senior citizens a way to reduce their tax burden and make the most of their savings during their retirement years.
 

Deductions available under 80TTB

• Interest from savings or fixed deposits in banks
• Interest from deposits with co-operative societies engaged in banking (including co-operative land mortgage/development banks)
• Interest from post office deposits
   

How to calculate your Section 80TTB deduction

Let us consider a senior citizen who is earning the following interest during the financial year

• Bank fixed deposit: Rs. 30,000
• Post office savings: Rs. 12,000
• Co-operative society deposit: Rs. 15,000
   

Here's how to calculate your deduction:

Your total interest income is Rs. 57,000 (30,000 + 12,000 + 15,000). You can claim Rs. 50,000 under Section 80TTB. The remaining Rs. 7,000 of interest will be considered part of your income and will be taxed according to you tax slab.
 

Exceptions under section 80TTB
 

Who cannot claim this deduction

• Individuals and HUFs below 60 years of age
• Non-Resident Indians (NRIs)
• Entities such as associations of Persons, bodies of Individuals, or firms (for interest earned on their savings accounts)
   

Limitations

• Senior citizens cannot claim deductions under Section 80TTB for interest earned on investments like company fixed deposits, NCDs, or bonds.
• If a senior citizen opts for the Alternative Tax Regime (Section 115BAC), they cannot claim the Section 80TTB deduction.
   

For senior citizens seeking a safe and reliable investment with steady returns, fixed deposits are a smart choice. They offer guaranteed returns that remain unaffected by market fluctuations, providing a dependable income source. You can consider Bajaj Finance Fixed Deposit, which caters to seniors with flexible payout options such as monthly, quarterly, half-yearly, or annually at maturity, and offers one of the highest interest rates in the market, up to 8.85% p.a.
 

Difference between Section 80TTA and Section 80TTB
 

Eligibility for Section 80TTB deduction

You may qualify for the Section 80TTB deduction if you meet the following criteria:

• Must be a resident of India.
• Age should be 60 years or above.
   

Required documents

There are no special requirements for claiming a deduction under Section 80TTB. Your PAN and bank statement are enough for tax calculation.
 

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