Section 80TTB of the Income Tax Act, 1961, provides a deduction for senior citizens on the interest income earned from specified sources. This section was introduced by the Finance Act, 2018, and it became effective from the financial year 2018-19 onwards. Here are the key features of Section 80TTB:
- Section 80TTB is applicable to resident senior citizens, i.e., individuals who are 60 years of age or more.
- Senior citizens can claim a deduction of up to Rs. 50,000 on the interest income earned from specified sources.
- Specified Sources: The deduction is available for interest income from the following specified sources:
- Interest on bank deposits (savings or fixed)
- Interest on deposits with a cooperative society engaged in banking business.
- Interest on post office deposits
- Deduction under Section 80TTB is in addition to the deduction available under Section 80C, which provides for deductions on various investments and expenses.
- Interest Income earned over the limit of Rs.50,000 will be taxed as per the applicable income tax slab of senior citizens.
- Interest income from fixed deposits with companies or institutions may not be eligible for this deduction.
