Income Tax News: In India, senior citizens enjoy special provisions under the Income Tax Act, aimed at easing their financial burden. Among these, Section 80TTB stands out as a significant boon, offering tax benefits specifically tailored to individuals aged 60 years and above.
Understanding Section 80TTB
Section 80TTB is a provision introduced in the Finance Budget of 2018, designed to provide relief to senior citizens regarding the interest income they earn from various sources. This section allows eligible individuals to claim a deduction of up to ₹50,000 on the interest earned from deposits in banks, cooperative societies, and post offices within a financial year.
Key Differences Between Section 80TTA and Section 80TTB
While both Section 80TTA and Section 80TTB offer deductions on interest income, they cater to different demographics. Section 80TTA applies to individuals below the age of 60 and Hindu Undivided Families (HUFs), granting a deduction of up to ₹10,000 exclusively on savings account interest. In contrast, Section 80TTB targets senior citizens, providing a higher deduction limit of ₹50,000 on interest earned from various deposits.
Important Points to Note
- Definition of Senior Citizen: Under Section 80TTB, a senior citizen is defined as an individual resident who is 60 years of age or older.
- Covered Deposits: This deduction encompasses interest earned on savings accounts, fixed deposits, and deposits in cooperative societies and post offices.
- TDS Exemption: Banks are not required to deduct any tax at source (TDS) from interest payments of up to ₹50,000 to senior citizens.
- Higher TDS Limit: Since interest up to ₹50,000 is exempt under Section 80TTB, senior citizens enjoy a higher threshold for TDS applicability, set at ₹50,000.
- Tax Applicability: Any interest income exceeding ₹50,000 is subject to tax as per the applicable slab rate for senior citizens.
- Exclusions: Interest income from company fixed deposits or bonds/NCDs does not qualify for relief under Section 80TTB.
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