Section 80TTB in respect of interest on deposits in case of a senior citizen, has been introduced by Finance Act, 2018 which is effective from A.Y 2019-20.
The deduction under section 80TTB is allowed only to a resident senior citizen i.e individual who is of the age of at least 60 years at any time during the previous year.
The deduction is available for any interest income on deposits with the following:
- Savings accounts with bank or banking companies
- Savings accounts with post office
- Savings accounts with a co-operative societies involved in banking business.
- Interest on fixed deposit
- Interest on time deposit
- Any other interest
The deduction under section 80TTB is Rs. 50,000 or the amount of interest ,whichever is lower deductible from the gross total income of the eligible assessee.
Interest earned from saving bank account, fixed deposit or any other interest is considered as income under the head “Income from other sources” and taxable as such.
*However no deduction is allowed to a partner of firm , member of AOI or BOI in respect of interest income earned from any account held by or on behalf of a firm, an association of person or body of individuals.