Section 80TTB of Income Tax Act 1961

Section 80TTB of Income Tax Act 1961

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Budget 2018 has introduced a new section80TTB of Income Tax Act 1961 for the benefit of resident senior citizens aged 60 years and above at any time during a financial year. Under section 80TTB of Income Tax Act 1961 a deduction of lower of Rs 50,000 or amount of specified income is allowed from gross total income

Specified income is any of the following income in aggregate:

  • Interest on bankdeposits (savings or fixed);
  • Interest on depositsheld in co-operative society engaged in the business of banking including co-operative land mortgage bank or a co-operative land development bank; or
  • Interest on post office deposits

 

 

Section 80TTA of Income Tax Act 1961 provides deduction similar to Section 80TTB of Income Tax Act 1961. However, it provides for deduction of interest only on savings account held in bank, co-operative bank or post office, from gross total income of individual taxpayer or hindu undivided family upto Rs 10,000.

With an introduction of section 80TTB of Income Tax Act 1961 exclusively for senior citizens, deduction under Section 80TTA of Income Tax Act 1961 is not available to senior citizens.

Non applicability of section 80TTB of Income Tax Act 1961

If specified deposits are held by or on behalf of a partnership firm, association of persons (AOP) or body of individuals (BOI), Section 80TTB of Income Tax Act 1961 deduction is not available in the hands of partner of such firm or any member of such AOP or BOI while computing their total income.

 

This section is applicable from 1st April 2018.


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