Understanding tax deductions can be confusing, but it’s essential to make the most of the tax benefits available. For senior citizens, Section 80TTB of the Income-tax Act, 1961 provides a great opportunity to claim deductions on interest income from deposits. In this blog, we’ll break down the basics of Section 80TTB and how seniors can use it to their advantage.
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Who Can Claim Deductions?If you are 60 years or older and a resident senior citizen, you are eligible to claim a deduction under Section 80TTB. This deduction allows you to claim up to Rs 50,000 on specified interest income.
Here Are Important Rules You Should KnowSection 80TTB covers interest income from various deposits. Here’s what you need to know:
Banking Institution Deposits: Includes savings accounts, fixed deposits, recurring deposits, etc.
Registered Co-operative Society Deposits: Covers interest income on deposits with any registered co-operative society.
Post Office Deposits: Encompasses interest income on deposits held with a post office.
How To Claim Section 80TTB Deduction While Filing ITR?
To claim the deduction, senior citizens can follow these steps while filing their income tax returns:
In the ITR form, go to the section where deductions are claimed. This is usually under the ‘Deductions’ or ’80’ sections.
Navigate to the interest income in the ‘Income from other sources’ category.
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Enter the relevant details, including the amount of interest income for which you are claiming a deduction.
Keep supporting documents such as bank statements, interest certificates, etc., ready in case they are required for verification by the tax authorities.
Double-check all the information you have entered to ensure accuracy and completeness.
After reviewing and ensuring that all details are accurate, submit your ITR online on the official income tax filing Maintain a copy of the filed ITR and supporting documents for your records.
Limitations of Section 80TTB
It’s important to note that there are limitations of Section 80TTB. The deduction is specifically applicable to interest income from specific sources:
Eligible Sources:
Interest received from banks (savings accounts, fixed deposits, and recurring deposits).
Interest from co-operative banks.
Interest from post offices (including savings accounts and schemes like NSC, Senior Citizen Savings Scheme, PO Monthly Income Scheme, etc.).
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Ineligible Sources
Interest from sources like company FDs is not eligible for this deduction.
The Bottom LineUnderstanding and utilising Section 80TTB can significantly benefit senior citizens during tax filing. By knowing the rules and limitations, seniors can ensure they maximise their deductions, providing a welcome relief during tax season.
