Income Tax Benefits for Senior Citizens on Interest from Savings and FDs

Do you know? section 80TTB of the Income Tax Act has tax benefits for the Senior Citizen that they can be available with some methods. We all know that senior Citizens earn income from Ineterst on their savings and fixed deposits. Here are the top hidden key points to save income tax on the income from savings and FDs. These benefits were introduced in the finance budget of the year 2018. Let’s discuss these interesting ways below.

As per Balwant Jain, a tax and Investment expert, section 80TTB of Income Tax allows senior citizens to avail the benefits of saving their interest income on fixed deposits and savings in the bank account. Individuals who are 60 years or above, can avail the benefit of claiming the deduction of ₹50,000 for the interest earned on their post office, bank, and other cooperative society deposits in a fiscal year. The deduction of ₹50,000 can be claimed under the senior citizen saving scheme.

• Senior citizen means an individual resident who is of the age of 60 years or more.
• Interest on bank deposits (savings or fixed)
• Interest on deposits held in a cooperative society engaged in the business of banking, including a cooperative land mortgage bank or a cooperative land development bank
• Interest on post office deposits
• Banks cannot deduct any tax at source or TDS from the payment of interest on deposits of up to ₹50,000 to senior citizens.
• Since interest under Section 80TTB is exempt up to Rs. 50,000 is exempt, the resident senior citizens enjoy a higher limit of ₹50,000/- for TDS on interest under Section 194A
• The amount of interest earned over ₹50,000 would attract the tax as per the applicable slab rate of senior citizens.
• Interest income from company fixed deposits or bonds/NCDs will not qualify for relief under Section 80TTB.

The above key points can be useful to claim a ₹50,000 deduction on the interest income earned from the Savings, Post Office, and Bank deposits. Stay tuned for more latest business news and finance articles on our website Industrial Front.