Section 80TTB was introduced with effect from financial year 2018-19.
Section 88TTB relates to deduction against interest amount received or receivable by Senior Citizens.
Senior citizen means the person who is 60 years old or more at any time during the current financial year. For example Mr. X completes 60 years on 05.09.18, he will be call Senior Citizen for financial year 2018-19.
The Interest income includes the following:-
- Interest from Saving Accounts and Fixed Deposit with Banks.
- Interest from Saving Accounts and fixed deposits with Post Offices.
- Interest from Saving Accounts and Fixed Deposits from Co-operative Societies engaged in banking business.
Amount of Deduction under section 80TTB:– Maximum amount of deduction of interest under section 80TTB is Rs.50,000/= or the actual amount received, which ever is less.
Mr. X is 62 years old. He received the following amount of interests during financial year 2018-19:-
- Interest from Saving accounts from Banks Rs.12000/=
- Interest from Saving Account from Post Office Rs.16000/=
- Interest from Fixed Deposit from Bank Rs.250000/=
- Interest from Fixed Deposit from Post Office Rs.80000/=
Calculate the net taxable income of Mr. X?
Interest from Saving accounts from Banks Rs.12000/=
Interest from Saving Account from Post Office Rs.16000/=
Interest from Fixed Deposit from Bank Rs.250000/=
Interest from Fixed Deposit from Post Office Rs.80000/=
Gross Interest Rs 358000/=
Less: Deduction under section 80TTB Rs.50000/=
Net taxable Income Rs.308000/=
Senior Citizens can not avail the benefit of Section 80TTA.
Section 80TTB is more beneficial in comparison of Section 80TTA. For example, benefits under section 80TTA is Rs.10000/= while under section 80TTB the amount of benefit is Rs.50000/=. The type of interest covered under Section 80TTA is only interest from Saving Bank Accounts but section 80TTB covers the interest from Saving Accounts as well as interest from Fixed Deposit Accounts.
Section 80TTB does not apply to the following persons:-
- Section 80TTB does not cover the individuals below 60 years.
- Section 80TTB does not applies to Hindu Undivided Family (HUF)
- Section 80TTB does not cover the Partnership firms, companies, Association of persons and charitable trust etc.
- Any interest received from Fix Deposits from Companies.
- Any Interest from Bonds.
- Any interest from Non-Convertible Debentures (NCD).
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