Under Section 80TTB of the Income Tax Act, which amount of benefits is available to senior citizens on account of interest income from deposits with banks or post-office or cooperative banks?

Question

Question

This question was previously asked in

UGC NET Paper 2: Commerce 4th March 2023 Shift 2

Answer 1

The correct answer is Rs. 50,000.

Key Points

Section 80TTB of the Income Tax Act, 1961, provides a deduction to senior citizens on account of interest income from deposits with banks, post offices, or cooperative banks.
This deduction is applicable to individuals who are resident senior citizens, i.e., those who are 60 years of age or older.

Important Points

Amount of Deduction -
- A senior citizen can claim a deduction of up to Rs. 50,000 for the interest income earned from deposits with banks, post offices, or cooperative banks.
Type of Deposits - The interest income must be earned from deposits with banks, post offices, or cooperative banks. This includes savings accounts, fixed deposits, recurring deposits, etc.
Deduction Limit -
- The maximum deduction that can be claimed under Section 80TTB is Rs. 50,000.
- This means that if a senior citizen earns interest income of Rs. 60,000 from their deposits, they can only claim a deduction of Rs. 50,000, and the remaining Rs. 10,000 will be taxable.
Interest from Other Sources -
- If a senior citizen earns interest income from other sources, such as corporate bonds, debentures, or fixed deposits with companies, it will not be covered under Section 80TTB.
- Such income will be taxable under the head 'Income from Other Sources'.

Additional InformationNo Age Restriction for Deduction on Savings Accounts -

While Section 80TTB specifically applies to senior citizens, it's important to note that there's no age restriction for claiming a deduction of up to Rs. 10,000 on interest income from savings accounts (under Section 80TTA).
This deduction is available to all individuals, including non-senior citizens.