- CA Sandeep Kanoi
- | Income Tax - Articles
- 04 Oct 2019
- 79,341 Views
- 19 comments
Deduction under section 80TTB was introduced for the first time in Budget 2018. Section 80TTB provides a deduction to senior citizens towards interest earned on deposits. The provisions of the same are explained hereunder –
Persons eligible for claiming deduction under section 80TTB
Deduction under section 80TTB is available only to a senior citizen. The explanation to section 80TTB defines ‘senior citizen’ as an individual, being resident in India, who is of 60 years or more at any time during the relevant previous year.
Type of income towards which deduction is available under section 80TTB
Any interest income earned by a senior citizen on deposits is allowable as a deduction under section 80TTB. The deposits should be held with any of the following –
- A banking company (i.e. banks) to which the Banking Regulation Act applies (it also includes banks referred to in section 51); or
- A co-operative society being engaged in carrying on banking business (it also includes a co-operative land development bank or a co-operative land mortgage bank); or
- A post office as defined under section 2 (k) of the Indian Post Office Act.
Section 80TTB (2) specifically states that any interest income earned from the savings account held by the firm or Association of Persons (AOP) or Body of Individual (BOI) shall not be allowed as deduction under section 80TTB to partners of the firm or members of the association or individual of the BOI.
Maximum amount of deduction available under section 80TTB
The maximum amount of deduction available under section 80TTB is lower of the following –
- The whole of the interest income; or
- INR 50,000.
In simple terms, if the eligible interest income is less than INR 50,000, then, the entire interest income would be allowed as deduction. However, in case the interest income is more than INR 50,000, then, only INR 50,000 would be allowed as a deduction under section 80TTB.
Understanding the difference between section 80TTA and section 80TTB
Both section 80TTA and section 80TTB provides deduction towards interest income. The following table would help the reader to understand the basic difference between section 80TTA and section 80TTB –
| Particulars | Section 80TTA | Section 80TTB |
| Eligibility | An individual and a Hindu Undivided Family (other than senior citizens) can claim deduction under section 80TTA. | Only a senior citizen can claim deduction under section 80TTB. |
| Type of income allowed as a deduction | Interest income earned on a savings account.
It doesn’t include fixed deposits interest or recurring deposits interest. |
Interest income earned on all types of deposits.
It includes interest earned on a savings account, fixed deposit or recurring deposits. |
| Maximum amount of deduction | INR 10,000 | INR 50,000 |
Frequently Asked Questions (FAQ) –
Q.1 What is Section 80TTB?
Ans: Section 80TTB of the Income Tax Act provides a deduction to a senior citizen in respect of interest income earned on deposits with a bank or a co-operative society or a post office. The maximum amount of deduction available in INR 50,000.
2. Does 80TTB include FD interest?
Ans: Yes, section 80TTB includes FD interest. Meaning thereby that interest earned on fixed deposits by a senior citizen is allowable as a deduction under section 80ttb.
3. Is FD interest taxable for senior citizens?
Ans: FD interest earned by the senior citizens is taxable, however, section 80ttb provides deduction towards the same maximum up to INR 50,000.
4. Is 80TTB part of 80C?
Ans: Deduction available under section 80TTB is over and above the deduction available under section 80c.
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In the efiling Preview version there had been specifically PRINTED the amount of Rs 50000 under sec 80TTB-Interest earned on deposits for senior citizens while I had submitted the efiling returns.But In come tax deptt has overlooked the entry and sent less amount of refund to bank a/c.
Now its solution? Please help.
I came across an article, which says that senior citizens having ONLY income of interest on bank deposits can claim the deduction and if they have salary income or pension sec 80ttb is not applicable. Can any one clarify
Is the interest from Senior citizen saving scheme In bank comes under section 80 TTB
Can claim by a Sr. citizen earned interest on his IT refund u/s 80TTB ? Is it eligible for deduction?
Can we claim both 80TTA & TTB at a time
Can we claim 80ttb on interest on deposit when tds already deducted
I understand that interest earned by routine savings interest earned from Banks by senior citizens is to be mentioned in 80C and interest earned through savings in post office is to be claimed in 80 TTB by senior citizens.
Can u avail tax exemption of ₹10,000 under tta
and ₹ 40000 under ttab ,overall limit not exceeding₹.& 50,000/-
Maxm deductions for 80c and 80ttb for residents sr citizen will be 200000/- while claiming return filing.
Whether Interest Earned on FD by senior citizen but not received can claim deduction under 80TTB?
AY 2020-21 (FY 2019-20)
(i) Sec 88TTA pertains to Individuals (other than Sr. Citizens) whereas Sec 88TTB relates to Sr. Citizens. Interest income from Savings Account and FDs in bank upto a max, of Rs.50,000/- is the deduction available to a Sr. Citizen under section 80TTB.
(ii) Investment under Senior Citizens Savings Scheme can be deducted upto Rs.1.5 lakhs under Sec 80C by a Sr. Citizen.
(iii) With the extension of the last date for filing of I.T. return for AY 2020-21 by resident Indians/Senior Citizen to 30th November, 2020, can his Self Assessment Tax for the AY 2020-21 be deposited through bank chalan before 30th November 2020 before filing the IT Return? In the earlier years, he used to remit Self Assessment Tax in June/July before filing his return.
Pl. clarify.
Please let me know the correct answer you may have received to your Question iii), regarding the latest date within which a Sr Ctz can pay his self- assessment tax dues in AY20-21 (to avoid interest payment) wherein the last date for filing returns is extended to Nov 30th 2020. In previous years, many Sr Ctzns paid all their additional tax dues as SA Tax just before the return filing due-date (31st July for most years or 31st Aug as in AY18-19 & AY19-20) and then submitted their return before due date (after including details of SAT payment). This method of SAT payment did not result in any issues. The amount of SAT payable did not matter then (whether >1 lakh or less than 1 lakh). SAT by definition is the remaining tax paid any time before the due date! So, what should be OK for a Sr Ctz this year (in AY20-21) who has to pay SAT >1 Lakh (and avoid paying any interest)?? Payment of all of the SAT (>1 Lakh) just before 31st July 2020? Or, just before 30th Nov 2020? Followed immediately by submission of the return after including details of SAT payment.
Please inform ASAP.
The distnction between sessions 80TTA and 80TTB is clearly explained. Thanks
A senior citizen can not avail deductions of RS.10000 under sec 80tta along with Rs.50000 under sec 80ttb ?
Thanks for very simple and lucid explanation on IT provisions for ease of understanding even by a layman
Thanks and very useful. Clearly clarified.
Thanks once again.
Provides the clear picture of the sec 80TTA & 80TTB.
Very useful post.
Very useful post.
Sec 80 ttb understood thoroughly. Thanks