During the Budget 2018, Finance Minister inserted a new Section 80TTB. This allows a tax deduction of up to Rs.50,000 with respect to interest income from FDs held by senior citizens. Let see the features of this section.
FDs or fixed instruments are the major backbones of many of the senior citizens. However, the majority of these fixed instruments are not so tax efficient. Hence, to give some relief to senior citizens Finance Ministry introduced this new Section 80TTB.
This amendment is effective from Financial Year 2018-19 or Assessment Year 2019-20.
Who is eligible to claim the deduction under Section 80TTB?
Senior Citizen who is holding the FDs with Banks, Co-operative Banks and also in Post Offices and earning the interest income from such deposits are eligible to avail the deduction under Section 80TTB.
Here, the meaning of senior citizen is an individual resident in India who is of the age of 60 Yrs or more at any time during the relevant financial year.
Firms, an association of persons or a body of individuals are not allowed to claim the deduction under Section 80TTB.
Also, if a senior citizen claimed the deduction under Section 80TTA (all individuals can claim up to Rs.10,000 deduction against the interest income received from a savings account), then they are not allowed to claim the deduction under Section 80TTB.
How much can we claim as the deduction under Section 80TTB?
As I mentioned above, if you are a senior citizen who is holding the FDs with Banks, Co-operative Banks and also in Post Offices and earning the interest income then you are eligible to claim up to the maximum of Rs.50,000 in each financial year.
The maximum deduction allowed under Section 80TTB is Rs.50,000. Hence, assume that you have Rs.45,000 as an interest income of FDs. In such situation, you are allowed to claim only the actual interest income (because the actual interest income is less than the maximum limit available under Section 80TTB).
Same way, assume that you have Rs.60,000 as an interest income from all FDs together. In that situation, as I mentioned the maximum deduction allowable for deduction under Section 80TTB is Rs.50,000, you can claim Rs.50,000 as the deduction. Rest of the Rs.10,000 will be your taxable income.
Difference between Section 80TTA and Section 80TTB
There is a slight difference between Section 80TTA and Section 80TTB. Hence, many get confused between these two income tax sections.
Hope above information clears you about Section 80TTB and also the difference between Section 80TTA and Section 80TTB.
Dear Basavaraj,
Effectively the total deductions that can be used by senior citizens is
* 80 TTB upto 50000 on intrests
* 80 C upto 1,50,000
* 80 CCB for health insurance premiums.
Am I missing any?
Dear Vineeth,
80CCB is not for health insurance it is 80D.
Can a person who will be 60 years in March 2019 claim education under sec 80TTB for the full year?
Dear Ranganathan,
Yes, as he is considered as a senior citizen for FY 2018-19.
If senior citizens FD interest income is 5 lakhs. Whether he will be eligible for 80TTB 50000 deduction?
Dear Jwalant,
Yes.
Can SCSS interest be claimed as deduction?
Dear Kumar,
There is no clarity in this front. However, as per me NO.
All of the banks consider SCSS as FD. e.g. in SBI, your SCSS account appears alongside other FD accounts. So I think interest from SCSS should be considered for 80TTB.
Dear Markand,
They may consider for their ease of tracking. How to believe that because of that we have to consider this under Sec.80TTB?
If a Senior citizen has income of 10000 Saving account interest and 40000 Bank FD interest, then how much deduction he claim u/s 80TTB 50000/- OR 40000/- ?
Dear Vijay,
Either he can claim the deduction of Rs.10,000 under Sec.80TTA or Rs.40,000 under Sec.80TTB.
If he has saving bank interest of 40000.00 and f.d. interest of5000.00. Can he claim 40000.00 interest under 80TTB?
Dear Omprakash,
Under Sec.80TTB, only FD interest can be claimed but not savings bank interest.
Dear Basavaraj
Can a senior citizen claim deduction under Sec.80 TTB on interest earned in a recurring deposit account?
Dear Shivaprasad,
Sadly NO.
Saving A/C interest can also be claimed for deduction it seem.
https://incometaxindia.gov.in/Lists/ASKITQA/DispForm.aspx?ID=2722&ContentTypeId=0x010069D38C628E58104A8F1AB291448CC759
This also says “any other interest”…what could that mean? RD interest, SCSS interest?
Dear Milind,
Yes, it is inclusive of those also.