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Section 80TTB Deduction for Senior Citizens

Updated on: Jun 6th, 2024

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6 min read

Old age is often associated with health concerns, both physical and mental, for senior citizens, which takes a heavy toll on their finances. Therefore, it is necessary to provide them with adequate relaxations in the form of tax deductions. 

Having this in mind, the government keeps on bringing new rules to simplify lives for senior citizens. The Finance Budget 2018 has chosen to introduce many benefits for our senior citizens. One such important amendment in Budget 2018 (for senior citizens) is the introduction of a new provision – Section 80TTB.

Applicability of Section 80TTB

Section 80TTB is a provision whereby a taxpayer who is a resident senior citizen, aged 60 years and above at any time during a Financial Year (FY), can claim a specified amount as a deduction from his gross total income for that FY. This Section is applicable w.e.f. 1st April 2018.

Note: This deduction is available only if the individual exercises the option of shifting out of the default tax regime provided under section 115BAC(1A).

Amount of deductions available under 80TTB

A deduction of Rs 50,000 or the income amount, whichever is lower, is allowed as deduction from the gross total income. Income here means any of the following income in aggregate:

  • Interest on bank deposits (savings or fixed)
  • Interest on deposits held in a co-operative society engaged in the business of banking, including a co-operative land mortgage bank or a co-operative land development bank
  • Interest on post office deposits

Exceptions to Section 80TTB

Suppose the specified deposits are held by or on behalf of a partnership firm. In that case, an Association of Persons (AOP), or a Body of Individuals (BOI), Section 80TTB deduction is not available for the partner of such a firm or any member of such an AOP or BOI while computing their total income.

Section 80TTA vs 80TTB

Section 80TTA provides deductions similar to Section 80TTB. However, it offers interest deductions up to Rs 10,000 only on a savings account (held in a bank, co-operative bank, or a post office) and only for taxpayers below the age of 60 years or to a Hindu Undivided Family (HUF).  

With the introduction of Section 80TTB exclusively for senior citizens, deduction under Section 80TTA is not available to senior citizens.

Difference between Section 80TTA and Section 80TTB

ParticularsSection 80TTASection 80TTB
ApplicabilityApplicable to individuals and HUF except for senior citizensApplicable to senior citizens
Specified incomeInterest on savings account onlyInterest on all kinds of deposits
Quantum of deductionUp to Rs 10,000Up to Rs 50,000

Illustration on tax savings by senior citizens

Senior citizens already enjoy a higher basic exemption limit compared to normal taxpayers. The introduction of Section 80TTB further aids tax savings for senior citizens. Let us see how with the following example. Let us consider the following incomes for a taxpayer:

  • Savings interest of Rs 5,000
  • Interest on fixed deposits of Rs 2,00,000
  • Other income of Rs 1,50,000

Now, the following table will help you understand how a senior citizen stands to benefit (as against a normal taxpayer) with the provisions of Section 80TTB 

Computation of Taxable Income

ParticularsNon-Senior Citizen (Rs)Senior Citizen (Rs)
Savings interest5,0005,000
FD interest2,00,0002,00,000
Other income1,50,0001,50,000
Gross total income3,55,0003,55,000
Less: Deduction under Section 80TTA5,000Not Applicable
Less: Deduction under Section 80TTBNot Applicable50,000
Taxable income3,50,0003,05,000

In the above example, a non-senior citizen can claim only a savings interest deduction of Rs 5,000 under Section 80TTA. Whereas a senior citizen can claim savings interest and fixed deposits interest deduction restricted up to Rs 50,000.
Read more about 80TTA here.

Documents Required

There are no special requirements while availing deduction under Section 80TTB. Your PAN, Interest certificate and bank statement is sufficient for tax computation.

Conclusion

Section 80TTB is introduced exclusively for senior citizens by amending Section 80TTA. It provides significant tax relief to Senior citizens who primarily invest securely in bank deposits and earn income from interest on such deposits. However, any interest received from other sources, such as interest on bonds and debentures will be ineligible for the deduction under this Section.

Related Articles

Section 80TTA- Deduction on interest on Savings account
Income from Other Sources
When & How to Pay Income Tax on Fixed Deposit’s Interest Income?

Frequently Asked Questions

I am a senior citizen aged 67 years and have income from a savings account of Rs 10,000 and interest from fixed deposits of Rs 60,000 from a nationalised bank. Can I claim a deduction under Section 80TTB?

Yes, you can claim deduction under Section 80TTB on both interest from savings and deposit accounts with banks, but the deduction amount is limited to Rs 50,000.

How can I claim a deduction under Section 80TTB?

You can claim deduction under Section 80TTB by filing your income tax return. First, the interest income from savings, recurring and deposits should be included in your income under the head ‘Income from other sources’, then one can claim Section 80TTB deduction.

80TTB deduction is applicable for AY 2024-25?

Yes, Section 80TTB deduction is applicable for AY 2024-25.

Is Section 80TTB applicable for super senior citizens?

Yes, this section applies to citizens above 60 years of age. Hence, this includes senior citizens as well as super senior citizens.

Are senior citizens eligible for both the deduction of interest income from deposits up to Rs, 50,000/-under section 80TTB and the deduction of up to Rs 1,50,000 available under section 80C?

Yes, the senior citizen is eligible for the deduction on interest income under Section 80TTB and deduction u/s 80C and other deductions only if he files returns under the old regime by exercising the option of shifting out of the tax regime provided under Section 115BAC(1A).

Is this section applicable to individuals who turn the age of 60 on April 1 2024, for the financial year 2023-24?

Yes, If an individual’s birthday happens to be on the 1st April of the Assessment year and he turns 60 years old, then he will be considered a senior citizen for the purpose of filing of relevant assessment year and he will be eligible to claim a deduction of Rs 50,000 under this section.

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Quick Summary

Government introduces Section 80TTB for senior citizens in Finance Budget 2018, offering a deduction of up to Rs 50,000 on specified incomes like bank deposits and post office funds. Senior citizens over 60 years can benefit from this provision by opting out of the default tax regime. This amendment simplifies tax computations for them, promoting financial relaxation. No deductions are available for partner firms under this section.

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