No hike in tax deduction under Sections 80TTA and 80TTB disappoints individuals, HUF and senior citizens

Individuals, Hindu Undivided Family (HUF) and pensioners who were expecting a hike in tax deduction under Sections 80TTA and 80TTB had to face disappointment on July 23, as Finance Minister Nirmala Sitharaman left tax deductions unchanged.

Under Section 80TTA of the Income Tax Act, 1961, finance minister offers deduction of Rs 10,000 on the income earned from interest on savings account with a bank, co-operative bank or post office. There is no deduction for interest earned from fixed deposits and recurring deposits in this section. Section 80TTA deduction is available to an individual (below the age of 60 years) and Hindu Undivided Family (HUF).

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Similarly, the deduction under Section 80TTB of the Income Tax Act, 1961 remains unchanged to Rs 50,000 on the income earned from interest on bank deposits (savings and fixed deposits) and interest on post office deposits. This deduction provides tax relief to senior citizens who primarily invest securely in bank deposits and earn income from interest on such deposits. However, interest income from investing in bonds and debentures will be ineligible for the deduction under this section.