Section 80TTB became a part of the Finance Bill in 2018 and has since been applicable.

Under Section 80TTB of Income Tax Act, senior citizens above the age of 60 are eligible to avail tax deductions up to INR 50,000, which are applicable on the interest income earned during a particular financial year.

1. Eligible Income:

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

2. Not Eligible Income:

• Individuals and Hindu Undivided Family apart from senior citizens can’t avail the tax exemption under Section 80TTB
• Non-resident Indians can not avail of 80TTB tax deductions.
• The interest income from a savings account owned specifically by Associate of Persons, firms, and a body of individuals will not be eligible for Section 80TTB deductions

3. Who can claim deduction:

• Taxpayers falling under the category of senior citizens
• Indian Residents
• Senior Citizens owning savings account, fixed deposit account, recurring deposit accounts.

4. Limit for deduction:

The maximum amount of deduction available under section 80TTB is lower of the following:

1. Rs 50,000 interest income
2. The total amount of interest income for the financial year.

5. How to claim deduction:

Assessee shall add the total amount of interest in his Gross Total Income. Then deduct the eligible amount (as mentioned in Point 1 above and maximum to Rs. 50,000/-) from the Gross Total Income.