As per the Income Tax Act, 1961, various exemptions and deductions are available to the income taxpayers to provide relief from the tax. Similarly, Tax savings on Interest income under section 80 TTA & 80 TTB provides relief on Interest income. The eligible assessee can claim the deductions while filing their Income-tax return.
This article explains section 80 TTA and 80 TTB, eligibility and quantum of deduction available to an eligible assesee.
Section 80 TTA – Interest income on saving bank account
The eligible persons are allowed to get exemption under section 80TTA only on the interest income earned from the following entities:
- Banks
- Post offices
- Co-operative society carrying on the banking business
Eligible persons:
- Individuals and Hindu Undivided Family (HUF)
- NRIs having interest income on NRE and NRO saving accounts
Deduction amount:
Interest earned on savings bank accounts is exempt up to Rs. 10,000 in a financial year (means the interest earned on a saving account or Rs. 10,000, whichever is less).
Note: No relief in case of time deposit, recurring deposits, and any other type of deposits.
Section 80 TTB – Interest income on saving bank account for senior citizens
The eligible persons are allowed to get exemption under section 80TTB only on the interest income (both saving and fixed) earned from the following entities:
- Banks
- Post offices
- Co-operative society carrying on the banking business
Eligible persons:
- Resident senior citizens, having age 60 years or more.
Deduction amount:
Interest earned on savings and fixed deposits from bank accounts is exempt up to Rs. 50,000 in a financial year. It means the interest earned on a saving account or Rs. 50,000, whichever is less.
Note:
1. An eligible assessee can’t take benefits of deductions under section 80 TTA and 80 TTB together. Therefore, if you are availing of the benefit of section 80 TTB, you are not eligible for section 80 TTA.
2. Co-operative banks include a co-operative land mortgage bank or a co-operative land development bank
A comparison glance on section 80 TTA and 80 TTB
| Basis | Section 80 TTA | Section 80 TTB |
| Eligibility | Individuals HUF NRIS | Resident senior citizens |
| Type of interest income | Saving account interest | Saving and Fixed account interest |
| Deduction amount allowed | Rs. 10,000 | Rs. 50,000 |
Conclusion:
An assessee must ensure eligibility before availing of tax savings on Interest income – 80 TTA & 80 TTB
Section 80 TTB benefit is higher than section 80 TTA to provide a maximum tax benefit to the senior citizens.
Further, if there is any NRI senior citizen, they can avail the benefit under section 80 TTA.