Interest earned by Senior Citizens on Deposits is Taxable subject to deduction under section 80TTB.
What is Section 80TTB?
Section 80TTB of the Income Tax Act 1961 provides a deduction in respect of interest earned on Specified Deposit to Senior Citizens and Super Senior Citizens.
Who is eligible to Claim Deduction under section 80TTA?
Deduction under section 80TTB is available only to Individuals aged 60 years and above, including senior citizens and super senior citizens (aged 80 Years & above).
Type of Interest Income Exempt
Section 80TTB provides deduction in respect of Interest earned on deposits with banks, cooperative banks, or post offices. This Includes various types of deposits, such as fixed deposits and recurring deposits, providing a substantial financial advantage to the elderly
Maximum Amount of Deduction
The maximum amount of deduction is limited to Rs. 50,000 in a financial year.
How to Claim Deduction under section 80TTA?
To claim deduction under section 80TTB of The Income Tax Act 1961, individuals need to report the interest earned from their deposits in the ‘Income from Other Sources’ section of their Income Tax Return (ITR) and the deduction can be claimed under Section 80TTB in Deduction Section.
Crucially, this deduction is independent of the existing Section 80C limit, enabling senior citizens to optimize their tax liabilities effectively. It acknowledges the unique financial needs of the elderly, encouraging them to manage their savings judiciously.
