What are I-T Section 80TTA and 80TTB?
Section 80TTA of the Income Tax Act was introduced in 2013. The primary object of this program is to give tax relief to individuals and Hindu Undivided Families (HUFs).
A taxpayer can deduct interest earned on accounts savings held with cooperatives, banks, societies, or post offices from taxable income up to INR 10,000. Tax benefits are provided for senior citizens who receive interest income from deposits under section 80TTB of the Income Tax Act.
In the Finance Budget 2018, senior citizens receive several benefits, including Section 80TTB, which grants them extra advantages. With the help of these measures, seniors will be able to manage their finances more effectively and live a more comfortable life.
Advantages of I-T Provisions for Senior Citizens
An income tax provision in India that could benefit senior citizens has been highlighted by well-known tax and investment tax experts. The interest earned on deposits in Post Offices, Banks, and Cooperative Societies in a given financial year can be deducted up to INR 50,000 for Indian residents who are 60 years or older. In India, this deduction applies to both savings and fixed deposits and can significantly reduce the tax liability of senior citizens.
Read Also: TDS on Rent: Penalties, Interest Rates and Applicability
A tax deduction is available for interest earned on savings bank deposits, fixed deposits, and recurring deposits, according to tax experts. The deduction also applies to interest earned on deposits made under the Senior Citizen Savings Scheme, as long as they fall within the overall limit of INR 50,000.
Major Dissimilarity Between Section 80TTA and 80TTB
Despite their differences, interest income is deductible under Section 80TTA and Section 80TTB. Those under 60 years of age and Hindu Undivided Families (HUFs) can deduct interest on savings accounts in banks, cooperative banks, or post offices under Section 80TTA. It is important to note that Section 80TTA does not cover senior citizens.
Major Key Points About Senior Citizen’s Interest Income
1) Firstly, a senior citizen is someone who is 60 years of age or older
2) Interest on bank deposits
3) Interest on deposits held in cooperative societies that engage in banking services, including cooperative land mortgage and cooperative land development firms
4) Interest on deposits of the post office
5) Senior citizens cannot be deducted TDS or tax at source from the interest paid on deposits up to INR 50,000
6) TDS on interest under Section 194A is exempt up to INR 50,000 for residents under Section 80TTB, but 50,000 is exempt for resident senior citizens.
7) Interest earned over INR 50,000 will be subject to the applicable senior citizen tax slab rate.
8) Section 80TTB does not apply to interest on fixed deposits or bonds/NCDs issued by companies.
Conclusion: If you are filing your income tax return (ITR) and want to save your money, then you should know some of the easy ways in which you can do it. There are software solutions available which can help you to choose during the ITR filing process, one such solution is the SAGInfotech Gen Income tax software. It comes with features that can help you claim tax deductions on your interest income. These deductions are called sections 80TTA and 80TTB.
The first one allows you to claim tax deductions on interest income earned from savings accounts, while the second one is for senior citizens who have deposits with banks and post offices. These software platforms are user-friendly and easy to navigate.
