Tuesday, April 23, 2024

Maximize Tax Savings for Senior Citizens: Harnessing the Power of Section 80TTB for Interest Income

Tax Saving Guide: The time for filing income tax return (ITR Filing) has come. Taxpayers must now calculate the tax on their income and see what their tax liability is and for this they can also see their AIS (Annual Information Statement). Also, this is the opportunity to make last minute investment to save tax. But we already have some investments, on which it is necessary to get full tax exemption for your savings. Especially, if you are going to file income tax return for your parents, then you must see how tax saving can be done on their old age fund. So here we are going to tell you about a special section of the Income Tax Act.

You get the benefit of Section 80TTB

Generally, senior citizens prefer to invest in fixed deposits or post office savings schemes instead of more risky investment tools. If your parents have also made investments on which they are earning interest, then this interest income is taxable. While filing income tax return, interest income also increases the tax liability, but for senior citizens, a separate section has been provided for tax deduction, in which they can save their interest earnings, this is Section 80TTB. Under the Income Tax Act, 1961, senior citizens are allowed to claim deduction on the interest received on their deposits.

What is the condition of Section 80TTB?

Under this section, any Indian senior citizen who is 60 years of age or above can claim exemption of up to Rs 50,000 on his interest income. If we talk about what kind of exemption it gives on interest earned, then deduction can be claimed on savings account, fixed deposit, recurring deposit etc. with any banking institution. Have invested in post office schemes and can also avail rebate on the interest on deposits made with any registered co-operative society.

How can you take advantage?

Whenever senior citizens fill or get their ITR filled, do not forget to avail exemption under Section 80TTB. In the ITR form, you will have to mention this income under ‘Income from other sources’ and then you can claim deduction by applying section 80TTB.

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