During the Budget 2018, Finance
Minister inserted a new Section 80TTB. This allows a tax deduction of up to
Rs.50,000 with respect to interest income from FDs held by senior citizens. Let
see the features of this section.
FDs or fixed instruments are the major backbones of
many of the senior citizens. However, the majority of these fixed instruments
are not so tax efficient. Hence, to give some relief to senior citizens Finance
Ministry introduced this new Section 80TTB.
This amendment is effective from Financial Year
2018-19 or Assessment Year 2019-20.
Who is eligible to claim the deduction under Section 80TTB?
Senior Citizen who is holding the FDs with Banks,
Co-operative Banks and also in Post Offices and earning the interest income
from such deposits are eligible to avail the deduction under Section 80TTB.
Here, the meaning of senior citizen is an
individual resident in India
Firms, an association of persons or a body of
individuals are not allowed to claim the deduction under Section 80TTB.
Also, if a senior citizen claimed the deduction under
Section 80TTA (all individuals can claim up to Rs.10,000 deduction against the
interest income received from a savings account), then they are not allowed to
claim the deduction under Section 80TTB.
