Section 80TTB Deduction for Senior Citizens

Know Section 80TTB in Detail

With the increasing age, health issues arise and senior citizen suffers from both physical and mental issues. This cost for living increases due to this and put a dent on their finances. Hence, the government decided to give relaxations to the senior citizen in the form of tax deduction. Therefore, the government introduced Section 80TTB which is applicable with effect from 1st April 2018.

Section 80TTB Applicability

According to section 80TTB, any taxpayer who is a senior citizen where the age of that citizen exceeds 60 years at any given period during a financial year can claim a certain amount of deduction from their gross total income of that financial year.

Amount of Deductions Available

Under Section 80TTB for senior citizen can claim a deduction not more than 50K INR or specified income amount is permissible from the gross total income. Where the specified income includes the below-mentioned things:

• Interest on fixed deposits or saving bank deposits;
• Any interest received on a co-operative society banks deposits consisting of a co-operative land development bank / co-operative land mortgage bank; or
• Any interest earned on deposit in the post office

Section 80TTB Exceptions

The deduction under section 80 TTB is not available for the partner or member of the following business or firm if the deposits are held on behalf of

• Partnership Firm
• AOP (Association of Person)
• Body of Individuals (BOI)

Section 80TTA and 80TTB Difference

Section 80TTA provides deductions to every individual on the interest earned on savings account up to the limit of 10K INR from the gross total income of such individual taxpayer. The person can avail such deduction on the interest earned in a bank, co-operative bank or a post office savings account.

Whereas Section 80TTB is introduced exclusively for senior citizens which can be claimed for up to the limit of 50K INR. Section 80TTB was introduced by the government as a senior citizen cannot avail deduction under section 80TTA.

Let us understand the difference between section 80TTA and 80TTB in T-shape

Example of Section 80TTB

Let us see the practical use of deduction under Section 80TTB

Senior citizen already has a higher basic exemption limit when compared with a normal taxable person. However, they have to look after their medical expense that itself back breaking thing. So to give more aid to them, the government introduced Section 80TTB. Let us see how a senior citizen can save their taxes using Section 80TTB:

Let us assume the following are the incomes of a senior citizen during a financial year:

• Interest received on saving account 10,000 INR
• Interest earned on FD of 1, 00,000 INR
• Other income 5, 00,000 INR

Let us see how Section 80TTB benefits a senior citizen to save more tax

So through the above example, we can notice that the before the introduction of Section 80TTB for senior citizen has to pay 35,880 INR as tax whereas after the introduction he has to pay 25,480 INR as tax.