Sunday, December 9, 2018

No tax on up to ₹50k interest for senior citizens

The Central Board of Direct Taxes (CBDT) has learnt of instances where banks wrongly deducted tax at source (TDS) on interest income earned by senior citizens. In a notification issued on December 6, it has clarified that no TDS has to be deducted under section 194-A of the Income Tax (I-T) Act in the hands of senior citizens, unless their interest income in the aggregate exceeds Rs 50,000 in a year.
Section 80-TTB was introduced with effect from April 1, 2018. Any individual, aged 60 and above, can claim a deduction of up to Rs 50,000 from his/her interest income. Thus, if the interest income is collectively less than this sum, TDS requirements do not come into play.

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