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Budget 2021 update :It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.Old age is often associated with health concerns, both physical and mental for the senior citizens, which in turn 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 in the Finance Budget 2018 has chosen to introduce a good number of benefits for our senior citizens. One such important amendment in Budget 2018 (for senior citizens) is the introduction of a new section – Section 80 TTB.
In this article, we will be discussing the following topics:
Particulars | Section 80TTA | Section 80TTB |
Applicability | Applicable to individuals and HUF except for senior citizens | Applicable to senior citizens |
Specified income | Interest on savings account only | Interest on all kinds of deposits |
Quantum of deduction | Upto Rs 10,000 | Upto Rs 50,000 |
Particulars | Normal taxpayer | Senior Citizen |
Savings interest | 5,000 | 5,000 |
FD interest | 2,00,000 | 2,00,000 |
Other income | 1,50,000 | 1,50,000 |
Gross total income | 3,55,000 | 3,55,000 |
Less: Deduction under Section 80TTA | 5,000 | Not Applicable |
Less: Deduction under Section 80TTB | Not Applicable | 50,000 |
Taxable income | 3,50,000 | 3,05,000 |
Tax (before 87A rebate) | 5,000 | 250 |
Less: Rebate under section 87A | 2,500 | 250 |
Tax payable including cess @ 4% | 2,600 | NIL |