Senior citizens already have to deal with mental and physical health issues that cause financial stress. So, to provide them with some aid, the Government of India introduced Section 80TTB of the Income Tax Act. This Section aims to simplify the lives of senior citizens and provide them with tax benefits.
To get more details on this Section, keep reading this article. Here we have discussed its exceptions, benefits, and eligibility criteria in brief.
Section 80TTB of the Income Tax Act, 1961 is applicable for a senior citizen who has crossed the age of 60 years and is a resident of India. Under this Section, they can claim a deduction against the amount received as interest on a deposit made by them. It is deducted from their total gross income at the time of tax calculation. This provision took effect from April 1 2018, to provide tax relief to senior citizens.
The deduction amount under Section 80TTB for a senior citizen cannot exceed Rs. 50,000 or a specified income from the overall gross income of an individual. This specified income includes any of the following aggregate income:
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The following are the essential benefits as to why the government introduced Section 80TTB:
The following are the essential criteria that an individual needs to fulfil to claim deduction under section 80TTB:
Deduction under Section 80TTB of the Income Tax Act for AY 2021-22 will not be available in case interest is received from deposits that are held by/on behalf of the following:
Other exceptions are as follows:
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An example is mentioned down here to help you understand the calculation process of deduction under Section 80TTB of the Income Tax Act:
Suppose here we are calculating deductions of Mr. Singh, a senior citizen having an age of 65 years and is a resident of India. The total earnings of Mr Singh are as follows:
|Source of Income||Amount Calculation|
|Interest earned from fixed deposit||Rs. 22,000|
|Interest earned from saving account deposit||Rs. 4,000|
|Interest from recurring deposit||Rs. 27,000|
|Total taxable amount||Rs. 53,000|
|Maximum Deduction allowed under Section 80TTB of the Income Tax Act||Rs. 50,000|
|Balance taxable amount from above||Rs. 3000|
|Interest from bonds||Rs. 2,500|
|Interest earned from a deposit made on behalf of a partnership firm||Rs. 15,000|
|Total deduction amount||Rs. 20,500|
You can find all the information you need on Section 80TTB of the Income Tax Act in the above section. It will guide you about who is eligible to claim deductions under Section 80TTB, exceptions, benefits of getting these deductions, etc. Go through these sections to avoid any confusion.
1. How to claim deduction under Section 80TTB?
To claim deduction under Section 80TTB, one must first add the aggregate amount of interest they get from different deposits included in the Section. Next, add them under the head ‘Deductions and Total Taxable Income’ to claim the amount. Your net amount remaining after deduction will be your taxable amount.
2. Is Section 80TTB deduction applicable for the assessment year 2021-22?
Yes, taxpayers will get deduction under Section 80TTB for the assessment year 2021-22. However, it is only applicable for those who are a resident of India and are aged above 60 years. Also, the deduction is deductible from the total gross income that an individual is earning in that financial year.
3. Is there any difference between Section 80TTB and 80TTA?
The following are the differences between Section 80TTB and 80TTA:
4. Can a senior citizen claim deduction under both Section 80TTA and 80TTB?
Since Section 80TTA deduction is only available to individuals and HUFs who are not senior citizens, a senior citizen cannot claim the benefits of both Section 80TTA and 80TTB. Also, it offers similar benefits, so one cannot avail both.
5. What are the documents required to claim deduction u/s 80TTB?
The following are the documents required to claim deduction under Section 80TTB:
When you have all the required documents, citizens must file their income tax returns and present them along with the form to the IT department.
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