Section 80TTB – For elderly people, old age is sometimes linked to health problems, both physical and mental, that carries a huge toll on their finances. As a result, it is important to give them access to appropriate relief in the manner of tax breaks With this in view, the government opted to implement a slew of advantages for our elderly people in the 2018 Finance Budget. The launch of a new section – Section 80 TTB – was one such significant modification in Budget 2018 (for senior citizens).
Section 80TTB is a clause that allows a taxpayer who happens to be a senior citizen of 60 years or older, at any point throughout the FY (FY), to subtract a defined amount from the gross income for FY. This clause is effective as of April 1, 2018.
Must Read – What is Section 80TTA?
Deductions available under Section 80TTB
From the gross total income, a deduction of less than ₹50,000 or an amount from a defined income is permitted. Any of the subsequent incomes, when added together, are referred to as specified income.
- Interest on Bank deposit.
- Interest earned on deposits kept in a co-operative community involved in the banking industry, such as a co-operative land mortgage bank or land development financial institution.
- Interest earned on the post office deposits.
Exceptions Under Section 80TTB
It must be observed that Section 80TTB primarily applies to elderly people who are Indian citizens, not NRI.
The following are examples of exceptions to section 80TTB.
- HUFs and non-senior citizens
- If the defined funds are maintained by or on part of a partnership firm, an association of persons (AOP), or a body of people (BOI), the partner of the company, or any representative of the AOP or BOI, cannot claim the Section 80TTB deduction when calculating their total income.
Many provisions were added to Section 80TTA to transform it into Section 80TTB, which was created specifically for elderly people. For complete privileges, one should meticulously submit their bank papers, with the PAN card playing a critical role. If the borrowers give their PAN, the bank deducts TDS (Tax deducted at Source) at a rate of 10%. If this is not assured, the rate will rise to 20%, which resulted in the depositor’s loss. Section 80TTB, which comes into place for the 2019-20 FY, has become a massive relief for elderly people. It will not become a negative fact that they are no longer allowed to use Section 80TTA. The separation of the Sections for ordinary and senior citizens would, in fact, render the taxation process much more efficient. Section 80TTB will become more respectful of elderly people who require special government support due to deteriorating health and wealth. With the new techniques of e-filing tax returns and deposits, the process for obtaining benefits is also simplified. As a result, the amendment becomes a saviour that should be acknowledged as a citizen opinion.