Deduction on Interest Income for Senior Citizen’s only from AY 2019–20

Sec­tion 80TTB has been includ­ed after Sec­tion 80TTA as a big relief to Senior cit­i­zens. Sec­tion 80TTB will be effec­tive from AY 2019–20 onwards. This deduc­tion will be avail­able for Senior cit­i­zen’s res­i­dent of India only. NRI would not get deduc­tion under Sec­tion 80TTB. A deduc­tion upto Rs.50,000/- will be avail­able under this section.

Where the gross total income of a senior cit­i­zen includes any income by way of inter­est on deposits with—

 (a) a bank

 (b) a co-oper­a­tive soci­ety engaged in car­ry­ing on the busi­ness of bank­ing or

 (c) a Post Office 

There­by inter­est income receipt form Fixed Deposit or Sav­ings or recur­ring Deposit what­ev­er the nature of deposit it is, deduc­tion will be avail­able if the deposit is held with a Bank, Post Office or a co-oper­a­tive soci­ety engaged in car­ry­ing on the busi­ness of bank­ing only. How­ev­er Inter­est income receipt from a Part­ner­ship Firm, a Indi­vid­ual, Bonds or deben­tures of any com­pa­ny or from any oth­er sources will not eli­gi­ble for deductions.

Quan­tum of Deduc­tion —

  (i) in a case where the amount of such income does not exceed in the aggre­gate fifty thou­sand rupees, the whole of such amount; and

 (ii) in a case where the amount of such income exceeds in the aggre­gate fifty thou­sand rupees, fifty thou­sand rupees only.

Eli­gi­bil­i­ty

• Senior Cit­i­zen (means an indi­vid­ual res­i­dent in India who is of the age of six­ty years or more at any time dur­ing the rel­e­vant pre­vi­ous year)
• Inter­est Income from bank or Post office deposits.

Note: How­ev­er Senior Cit­i­zen would not get the deduc­tion from 80TTA (Deduc­tion upto 10,000/- on inter­est income from sav­ings Bank) from AY 2019–20 onwards.