Budget 2025 Update
As per the proposal in Budget 2025, the threshold limit for TDS deduction under Section 194A on interest income from bank deposits is set to be increased. For senior citizens, the new proposed limit is Rs. 1,00,000, while for all other taxpayers, it remains at Rs. 50,000.
Deductions available under 80TTB
- Interest from savings or fixed deposits in banks
- Interest from deposits with co-operative societies engaged in banking (including co-operative land mortgage/development banks)
- Interest from post office deposits
How to calculate your Section 80TTB deduction
Let us consider a senior citizen who is earning the following interest during the financial year
- Bank fixed deposit: Rs. 30,000
- Post office savings: Rs. 12,000
- Co-operative society deposit: Rs. 15,000
Here's how to calculate your deduction:
Your total interest income is Rs. 57,000 (30,000 + 12,000 + 15,000). You can claim Rs. 50,000 under Section 80TTB. The remaining Rs. 7,000 of interest will be considered part of your income and will be taxed according to you tax slab.
Also read: What is TDS
Exceptions under section 80TTB
Who cannot claim this deduction
- Individuals and HUFs below 60 years of age
- Non-Resident Indians (NRIs)
- Entities such as associations of Persons, bodies of Individuals, or firms (for interest earned on their savings accounts)
Limitations
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Applicability of Section 80TTB
Section 80TTB allows resident senior citizens—individuals aged 60 or above at any point during a financial year—to claim a deduction from their gross total income. This benefit has been effective from 1st April 2018.
Note: The deduction under Section 80TTB can be claimed only if the individual opts out of the default tax regime specified under Section 115BAC(1A).
Eligibility for Section 80TTB deduction
You may qualify for the Section 80TTB deduction if you meet the following criteria:
- Must be a resident of India.
- Age should be 60 years or above.
Required documents
There are no special requirements for claiming a deduction under Section 80TTB. Your PAN and bank statement are enough for tax calculation.
Also read: Types of TDS
Illustration on tax savings by senior citizens
Senior citizens are entitled to a higher basic exemption limit than regular taxpayers. Additionally, with the introduction of Section 80TTB, they gain further tax-saving benefits. Here’s an example to illustrate this advantage:
Let us assume the following income details for an individual:
- Savings account interest: Rs. 5,000
- Fixed deposit interest: Rs. 2,00,000
- Other income: Rs. 1,50,000
The table below compares the tax treatment for a non-senior and a senior citizen:
Particulars
|
Non-Senior Citizen (Rs.)
|
Senior Citizen (Rs.)
|
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
|
Deduction under Section 80TTA
|
5,000
|
Not Applicable
|
Deduction under Section 80TTB
|
Not Applicable
|
50,000
|
Taxable Income
|
3,50,000
|
3,05,000
|
Difference between Section 80TTA and Section 80TTB
Parameter
|
Section 80TTA
|
Section 80TTB
|
Introduced
|
Assessment Year 2013-14
|
Assessment Year 2019-20
|
Eligibility
|
Individuals and HUFs below 60 years of age
|
Senior citizens only
|
Qualified sources
|
Interest earned on saving account
|
Banks, co-operative societies engaged in banking business, and post offices
|
Exemption limit
|
Up to Rs. 10,000 annually
|
Up to Rs. 50,000 annually
|
NRI eligibility
|
Yes
|
No
|
How to claim deductions under Section 80TTB?
To claim deductions under Section 80TTB, follow these steps:
Calculate your total interest income – Add up interest earned from savings accounts, fixed deposits, and post office deposits during the year.
Check the deduction limit – You can claim up to Rs. 50,000 under Section 80TTB. If your interest income is higher, the maximum deduction allowed is still Rs. 50,000.
Report while filing ITR – Show the interest under "Income from Other Sources" and claim the deduction in your income tax return.
Keep necessary documents – Maintain passbooks, bank statements, and interest certificates as proof in case of scrutiny.
Senior citizens should file their ITR before 31st July to avail the deduction. If tax filing feels overwhelming, you can reach out to our tax experts for end-to-end support—from filing to maximising savings and even post-filing assistance.
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