Applicable to: *Individuals aged 60+ years (including NRIs)*
This section provides higher tax relief on interest income from deposits, recognizing the financial needs of senior citizens.
Key Features (AY 2025-26)
1. Eligible Income Sources
✅ Interest from:
- Fixed Deposits (FDs)
- Recurring Deposits (RDs)
- Savings Accounts
- Post Office Schemes (SCSS, MIS, TD)
- Bank Deposits
❌ Excludes:
- Interest from bonds/debentures
- Dividend income
2. Deduction Limit
| PARAMETER | LIMIT |
| Maximum Deduction | ₹50,000/year |
| Income Type | Interest (Form 16A/26AS) |
| TDS Threshold | ₹50,000 (banks deduct 10% TDS beyond this) |
- Special Cases
- Joint Accounts:Deduction available only to the senior citizen account holder
- NRI Deposits:Eligible but subject to NRI tax rules
Illustrative Example
Case: Senior citizen earns ₹70,000 interest from FDs + SCSS
- Taxable Before 80TTB:₹70,000
- Deduction Claimed:₹50,000
- Taxable After 80TTB:₹20,000
- Tax Saved (@30%):₹15,000
Comparison with 80TTA (Non-Seniors)
| FEATURE | 80TTB (SENIORS) | 80TTA (NON-SENIORS) |
| Eligible Deposits | FDs/RDs/Savings | Only Savings Accounts |
| Max Deduction | ₹50,000 | ₹10,000 |
| Age Requirement | 60+ years | Below 60 years |
Pro Tips for Maximizing Benefits
- Split Depositsacross banks to manage TDS (₹50k threshold per bank)
- Opt for Monthly Interest Payoutsto stay under deduction limit
- Combine with SCSS(7.4% interest + ₹1.5L 80C deduction)
FAQs
Q: Can a senior claim both 80TTB and 80TTA?
A: No, 80TTB replaces 80TTA for seniors.
Q: Is Post Office MIS interest eligible?
A: Yes, all deposit interest qualifies.
Q: What if TDS was deducted on ₹45k interest?
A: Claim full refund as it’s below ₹50k threshold.
Section 80TTB offers 5x higher benefits than 80TTA, making it ideal for seniors relying on interest income. To optimize:
- Prefer Senior Citizen Schemes(higher interest + tax benefits)
- Monitor Form 26ASfor TDS reconciliation
- File ITR-1/2even if income is below taxable limits
