Tax Savings Tips: In the assessment year 2025-26, senior citizens can save huge tax on interest from savings account, FD and post office deposits under section 80TTB. Know what is its complete process.
Tax Exemption: The time for filing income returns for assessment year 2025-26 (AY 26) is going on. In such a situation, it is important for senior citizens to know how they can save as much tax as possible. Section 80TTB is especially important for them.
1. What is Section 80TTB?
Section 80TTB, introduced in the 2018 budget, provides senior citizens with a tax exemption on interest income. Under this provision, a deduction of up to ₹50,000 can be availed on interest earned on bank, post office or co-operative society deposits.
2. Who can avail the benefit?
This exemption is available only to resident Indian senior citizens i.e. people aged 60 years or above. Remember, this facility is available only in the old tax regime. It cannot be availed in the new tax regime (115BAC).
3. On which income will you get the benefit?
Section 80TTB can be availed on interest earned from savings account, fixed deposit and post office deposit. This facility is special because it includes not only savings account but also interest earned on other deposit schemes.
4. Understand with an example
Suppose a senior citizen gets ₹8,000 from savings account, ₹1,80,000 from FD and ₹3,00,000 from pension. In this case, the total income will be ₹4,88,000. But after deduction of ₹50,000 under section 80TTB, the taxable income will be ₹4,38,000.
5. What documents will be required?
No additional papers are required to claim this deduction. Common documents like PAN card, bank statement and interest certificate are sufficient. That is, the process is easy and there is no additional hassle.
6. Difference between 80TTA and 80TTB
Individuals below 60 years of age and HUFs can get deduction of up to ₹10,000 only on interest earned on savings account under section 80TTA. But for senior citizens, section 80TTB is more beneficial as it covers all deposit schemes and limits up to ₹50,000.
7. Section 194A and TDS relief
Section 194A applies when it comes to TDS on interest income. Here the limit is ₹50,000 for senior citizens and ₹40,000 for other individuals. Budget 2025 proposes to increase these limits to ₹1,00,000 and ₹50,000 respectively.
8. Why is it special for senior citizens?
Section 80TTB is important for senior citizens because a large part of their income depends on interest and pension. This provision gives them direct tax savings and relief on income from investments.
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