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Old age is often associated with health concerns, both physical and mental for 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 keeps on bringing new rules to simplify lives for senior citizens.
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.
CBDT has issued a circular on 20th May 2021 extending the timelines for certain direct tax compliances for AY 2021-22.
1. ITR Filing:
i. The due date for filing ITR by taxpayers (whose accounts not required to be audited) is extended from 31st July 21 to 30th Sep 21.
ii. The ITR filing for Tax audit cases is extended to 30th Nov 2021
iii. The ITR filing for Transfer Pricing cases is extended to 31st December.
iv. The due date to file a Belated or Revised Return is extended from 31st Dec 2021 to 31st Jan 2022.
2. Furnishing Audit Report:
i. The due date to furnish the audit report under Income Tax Act is extended to 31st Oct 2021
ii. The due date of furnishing of audit report for transfer pricing cases is extended to 30th Nov 2021.
Union Budget 2021 Update:
Exemption from ITR filing to senior citizens aged 75 years and above, earning only pension and interest income.
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 1 April 2018.
A deduction of lower than Rs 50,000 or an amount from a specified income is allowed from the gross total income. Specified income is any of the following income in aggregate:
If the specified deposits are held by or on behalf of a partnership firm, 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 for 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 provides deductions of interest only on a savings account held in a bank, co-operative bank, or a post office, from the gross total income of the individual taxpayer or a Hindu undivided family up to Rs 10,000.
With the introduction of Section 80TTB exclusively for senior citizens, deductions under Section 80TTA is not available to senior citizens.
|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|
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:
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 Tax computation(Amount in Rs)
|Particulars||Normal taxpayer||Senior Citizen|
|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|
|Tax (before 87A rebate)||5,000||250|
|Less: Rebate under section 87A||2,500||250|
|Tax payable including cess @ 4%||2,600||NIL|
NOTE: For the AY 2020-21, the rebate under section 87A is available up to Rs 12,500 (for a total income up to Rs. 5,00,000). Hence, the above tax computation would change accordingly. In the above example, the senior citizen ends up paying no taxes in comparison to an ordinary taxpayer, below 60 years of age, who pays Rs 2,600. Read about 80TTA here
Yes, you can claim deduction under section 80TTB on both interest form savings and deposit accounts with banks, but the deduction amount is limited to Rs.50000.
80TTB deduction can be claimed by filing your Income Tax Return. First, the income should be included in your income, and then 80TTB deducted can be claimed.
Yes, 80 TTB deduction is applicable for AY 2020-21