Section 80TTB, introduced in the Budget of 2018, aims to provide tax relief for senior citizens on interest earned from deposits. Under this provision, senior citizens can enjoy significant tax deductions, making it crucial for those eligible to understand its eligibility criteria, limitations, and benefits fully.
Section 80 TTB deductions are available only to resident individuals aged 60 or above. Senior citizens holding savings accounts, fixed deposits (FDs), or recurring deposits (RDs) can claim deductions on interest earned from these accounts during the fiscal year.
The deduction limit under Section 80TTB is the lower of:
For example, if the interest earned in a year is ₹40,000, then the full ₹40,000 can be deducted under Section 80 TTB. However, if the interest exceeds ₹50,000, only ₹50,000 will be eligible for deduction.
To claim deductions under Section 80 TTB, senior citizens should maintain:
The following entities are not eligible for Section 80 TTB deductions:
You may also want to know Section 94A of Income Tax Act
Deductions can only be claimed on interest earned from savings, fixed, and recurring deposits with:
Interest earned on company deposits, NCDs (Non-Convertible Debentures), or bonds does not qualify. Additionally, senior citizens opting for the Alternative Tax Regime under Section 115BAC will not be eligible for Section 80 TTB deductions starting FY 2022-23.
Senior citizens can claim Section 80 TTB deductions by filing their Income Tax Returns (ITR). Here’s how:
Senior citizens enjoy a higher basic exemption limit than regular taxpayers. Section 80 TTB offers additional tax-saving opportunities on interest earnings, reducing their overall tax liability significantly.
Let’s assume Mr. Ravi, a senior citizen, has earned:
| Interest Source | Senior Citizens | Regular Taxpayers |
| Savings account | ₹5,000 | ₹5,000 |
| Fixed Deposit | ₹2,00,000 | ₹2,00,000 |
| Other income | ₹1,50,000 | ₹1,50,000 |
| Total | ₹3,55,000 | ₹3,55,000 |
| 80TTA Deduction | Not Applicable | ₹5,000 |
| 80TTB Deduction | ₹50,000 | Not Applicable |
| Taxable Earnings | ₹3,05,000 | ₹3,50,000 |
| Tax with 87A rebate | Nil | ₹2,600 |
You may also want to know Form 15H
| Criteria | Section 80TTA | Section 80TTB |
| Introduction Year | 2013-14 | 2019-20 |
| Eligibility | HUFs, Individuals | Senior Citizens Only |
| Eligible Deposits | Savings Account Only | Savings, FDs, RDs |
| Max Deduction | ₹10,000 annually | ₹50,000 annually |
| Applicability on NRI | Applicable | Not Applicable |
Section 80TTB of the Income Tax Act is a valuable provision for senior citizens, promoting tax savings on interest earnings from deposits. Understanding this section’s provisions, eligibility, and limitations ensures that senior citizens maximize their tax savings effectively.
Only resident senior citizens (aged 60 and above) can claim deductions under Section 80TTB.
The maximum deduction available is ₹50,000 or the actual interest earned, whichever is lower.
No, NRIs cannot claim deductions under Section 80TTB. It applies only to resident senior citizens.
No, only one of these sections can be claimed. Section 80TTB provides a higher deduction limit, but only for senior citizens.
Interest from savings accounts, fixed deposits, and recurring deposits held with banks, post offices, or cooperative societies qualify under Section 80TTB.
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