Recently in 2018 budget, our finance minister adds a new column in the budget which was section 80TTB. This is a tax deduction section in which senior citizens can get the benefits of tax deduction of Rs. 50,000. This tax deduction applies to the interest coming from FDs for a senior citizen.
Before this, there was a tax deduction of Rs. 10,000 with respect to the interest coming from an FD or saving accounts, However, this amendment will be in action from 1st April 2019. For senior peoples, FDs and saving accounts behaves like their major source of income like a backbone that is why our finance minister has come up with this new amendment in 2018th budget session.
If you want to know more about this like who is eligible for this tax deduction and how much one can claim for a tax deduction and some other details then this is the right place for you.
Eligibility criteria to claim tax deduction benefits under section 80TTB
One who is an Indian senior citizen and who hold an FD in any cooperative bank, post office or in any other bank can avail the benefits of the tax deduction under this section 80TTB.
Who comes under senior citizens category?
Now the biggest question which you can have is that who is an Indian senior citizen, so here is the answer. While most people might know but still if you don’t know then here is the answer.
An Indian senior citizen is an Indian citizen of age 60 and more and the age is counted at the time of the relevant financial year for which one wants to claim the tax deduction.
Exclusions under eligibility
Any firm or any association of the person who is a senior citizen is not allowed to claim the tax benefits. Other then this if a senior citizen has claimed tax benefits under section 80TTA then one can’t claim tax benefits for section 80TTB.
In section 80TTA, a person can claim the tax benefits of interest coming from a saving amount for up to Rs. 10,000. If a senior citizen has already claimed under 80TTA section then he/she is not eligible for claiming process of 80TTB.
So, how much tax deduction benefits a senior citizen can have under this section 80TTB?
If you are of 60 and more than 60 years in age and if you have a saving account or FD in any bank, post office or in any co-operative bank, as discussed earlier then you are eligible to claim the benefits of Rs. 50,000 per financial year. It means you can get benefits of tax deduction of Rs. 50,000 each year.
This is the maximum amount for tax deduction like if you have the interest of Rs. 48,000 then you can claim to get benefits of a tax on the amount of interest you got from your FD. While in case if you had earned interest more than 50,000 then you need to pay tax on the extra interest you have earned like if you have earned Rs. 55,000 as the interest of your FD then you will get tax benefits on 50,000 Rs. and on the rest amount, you need to pay tax. It means you have to pay tax for the 5,000 Rs.