Section 80TTB Deduction for Senior Citizens

Learn about the eligibility criteria for Section 80TTB and how to claim this valuable deduction.
Section 80TTB
3 min
23-March-2024

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.

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

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.

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.

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. 

For senior citizens seeking a safe and reliable investment with steady returns, fixed deposits are a smart choice. They offer guaranteed returns that remain unaffected by market fluctuations, providing a dependable income source. You can consider Bajaj Finance Fixed Deposit, which caters to seniors with flexible payout options such as monthly, quarterly, half-yearly, or annually at maturity, and offers one of the highest interest rates in the market, up to 8.85% p.a.

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

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.

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.