What are tax exemptions under SCSS - on Maturity, premature withdrawal and extension? According to section 80TTB of the Income Tax Act, you can save up to Rs. 50,000 on interest earned in one FY. TDS (Tax Deducted at Source) is deducted when annual interest amount exceeds Rs.
Section 80TTB is a provision whereby a taxpayer who is a resident senior citizen, aged 60 years and above at any time during a Financial Year (FY), can claim a specified amount as a deduction from his gross total income for that FY. This Section is applicable w.e.f. 1st April 2018.
According to Section 80TTB of the Income Tax Act, people over the age of 60 are eligible to avail tax deductions up to ₹50,000. This 80TTB deduction is applicable to the interest income earned during a particular financial year.
For senior citizens above the age of 60 years, interest is taxable if the total interest paid in all SCSS accounts in a financial year exceeds Rs. 50,000 (for those below 60 years it is Rs 40,000), and TDS at the nominal rate is deducted from the total interest paid.
Under Section 80TTB deduction, senior citizens can claim income tax exemption of upto Rs. 50,000/- on interest income earned. Introduction of Section 80 TTB allows a special benefit to be claimed by senior citizens who are largely dependent on interest income for their post-retirement expenses.
The deduction is up to Rs. 50,000 in view of the interest from the deposits held by senior citizens. Senior Citizens holding the FDs, savings account at Banks, Co-operative Banks, and Post Offices, earning interest from such deposits, are eligible to have the deduction under section 80TTB.
A deduction under section 80TTB is available to a senior citizen who is a resident of India. A senior citizen is a resident individual taxpayer whose age is more than 60 years at any time during the financial year for the purpose of section 80TTB.
This office is receiving various representations from the SCSS account holder(s) that CBS post offices are either not deducting TDS or deducting TDS even after submission of form 15G/15H or deduct TDS at the higher rate on SCSS interest payment. 2.
Relief under Section 80TTA is limited to savings accounts while Section 80TTB covers both savings account and fixed deposit accounts. Relief under Section 80TTA available to individuals and HUF. Section 80TTB provides relief to only individuals. Section 80TTB provides relief to only resident senior citizens.
(4) Deduction available under section 80TTA/80TTB will not be available to the taxpayers. "As Section - 80TTA and 80TTB are covered under chapter-VIA and the new tax regime excludes deductions under chapter-VIA subject to certain exceptions.
Deduction under section 80TTA/TTB is not reflected Print
Therefore, if you have savings interest deduction u/s 80TTA/TTB might not be or is partially reflected under Chapter VIA deductions. Read more about the Set-off of losses against Income from other sources.
An individual can claim deduction under either Section 80TTA or Section 80TTB, not both.
Interest on SCSS is taxable as per the tax slab applicable to the person. In case the interest amount earned is more than Rs. 50,000 for a fiscal year, Tax Deducted at Source (TDS) is applicable to the interest earned. This limit for TDS deduction on SCSS investments is applicable from AY 2020-21 onwards.
One can invest a maximum of Rs 15 lakh in Senior Citizens' Savings Scheme (SCSS) in their individual capacity. But one can hold a joint account with one's spouse, where the spouse has to be a first holder, and deposit another Rs 15 lakh. So, effectively, one can deposit a maximum amount of Rs 30 lakh.
The amount deposited in the SCSS account earns interest for a term of five years. An account holder can apply for a one-time extension of three years within one year of the maturity of the account. The deposit in an extended SCSS account will earn interest at the rate applicable on the date of maturity.
A Senior Citizen Savings Scheme (SCSS) account has a tenure of five years and the deposited amount is paid back to the investor on maturity. While the depositor can open a new SCSS account after the maturity, however, the depositor has the option to extend the maturity by three years.
Ans: Yes, one can open a joint SCSS account with his/her spouse only and the maximum amount that can be invested in it is Rs. 15lakhs only.
You can extend the Senior Citizen Savings Scheme (SCSS) Account up to 8 years. On maturity after 8 years, can I open another account? The tenure of Senior Citizen Savings Scheme (SCSS) Account is five years.
Also, individuals can make a deposit only once, at the time of opening an account. Eligible individuals can start more than one account under this scheme. However, the deposit limit of all those accounts combined is also capped at Rs. 15 lakh.
It is in effect from the assessment year of 2019-20. HUFs and individuals can avail the deductions allowed under Section 80TTA. Only senior citizens can avail the deductions made available under 80TTB. Only interest on savings accounts qualifies for a deduction under this section.
Moreover, under Section 87A of the Income Tax Act, if the income of the senior citizen is up to INR 5 lakhs, a full tax rebate of INR 12,500 would be applicable on the tax liability from FY 2019-20; AY 2020-21.
Relief under Section 80TTA is limited to savings accounts while Section 80TTB covers both savings account and fixed deposit accounts. Relief under Section 80TTA available to individuals and HUF. Section 80TTB provides relief to only individuals. Section 80TTB provides relief to only resident senior citizens.
As per the latest changes in the Income Tax Act, the standard deduction for senior citizens is ₹50,000. As per the latest changes in the Income Tax Act, the standard deduction for senior citizens is ₹50,000.