Section 80TTB

Section 80TTB offers senior citizens a Rs. 50,000 deduction on bank interest income, providing tax relief for those aged 60 and above.
OPEN FD
Section 80TTB
OPEN FD
3 min
29-May-2025

Many seniors face health challenges that can impact their financial well-being. To address this, the government introduced Section 80TTB in the 2018 budget. Section 80TTB provides tax breaks on certain types of income, reflecting the government's ongoing commitment to supporting and improving the lives of senior citizens.

What is Section 80TTB?

Section 80TTB of the Income Tax Act is designed specifically for senior citizens. This section allows them to claim a deduction of up to Rs. 50,000 on interest income earned from several types of deposits. These deposits can be held with banks, co-operative societies engaged in banking business, and post offices. It is important to note that this deduction applies only to the interest earned, not the entire principal amount deposited. Section 80TTB offers senior citizens a way to reduce their tax burden and make the most of their savings during their retirement years.

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Pro tip

Bajaj Finance offers attractive Fixed Deposit interest rates of up to 6.95% p.a. for non-senior citizens, and up to 7.30% p.a. for senior citizens, inclusive of an additional rate benefit of up to 0.35% p.a.

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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

  • Senior citizens cannot claim deductions under Section 80TTB for interest earned on investments like company fixed deposits, NCDs, or bonds.
  • If a senior citizen opts for the Alternative Tax Regime (Section 115BAC), they cannot claim the Section 80TTB deduction. 

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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.

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

 

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Frequently asked questions

Is FD interest deductible under 80TTB?

Yes, interest earned on fixed deposits (FDs) held with banks, cooperative societies, and post offices is eligible for deduction under Section 80TTB.

Is Section 80TTB applicable for super senior citizens?

Yes, Section 80TTB is applicable for super senior citizens (individuals aged 80 years or above).

How can I claim a deduction under Section 80TTB?

When filing your income tax return, report eligible interest income in the 'Income from other sources' section. and then you can claim Section 80TTB deduction.

Can I claim 80TTA and 80TTB both?

No, you cannot claim both 80TTA and 80TTB deductions in the same financial year. While 80TTA applies to individuals under 60, 80TTB is exclusively for senior citizens, providing a higher deduction limit on interest income.

Is 80TTB applicable in new tax regime?

No, 80TTB is not applicable under the new tax regime. The new regime does not allow deductions under Section 80TTB or other common tax-saving sections, such as 80C or 80D, for senior citizens.

Can I claim 80TTB for my parents?

No, you cannot claim 80TTB deductions for your parents. Section 80TTB is applicable only to senior citizens on their own interest income. However, if your parents are eligible, they can claim it individually.

How do I enable 80TTB?

To claim the 80TTB deduction, ensure that you are a senior citizen and calculate your total interest income from savings accounts, fixed deposits, and other eligible sources. When filing your income tax return, declare the interest income and claim the deduction under Section 80TTB.

Is interest on FD deductible in 80TTB?

Yes, under Section 80TTB, resident senior citizens can claim a deduction of up to Rs. 50,000 on interest earned from fixed deposits, savings accounts, or recurring deposits held with banks, post offices, or cooperative banks.

Is 80TTB allowed in the new tax regime?

No, Section 80TTB benefits are not available under the new tax regime (Section 115BAC). To claim this deduction, senior citizens must opt for the old tax regime while filing their income tax returns.

How to add 80TTB in income tax?

To claim 80TTB, select the deduction under the "Deductions under Chapter VI-A" section while filing your income tax return. Ensure you are using the old tax regime and report total interest income correctly before claiming up to Rs. 50,000 deduction.

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Disclaimer

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