Income Tax Deductions | FAQs on Deductions in Income Tax Act [As updated by Finace Act 2018]

Deduction Under section 80 TTB
Under which section interest on deposit in case of senior citizens is allowable as deduction| What is the upper limit/maximum deduction allowed under section 80TTB| What is the maximum deduction allowable under section 80TTB| Who is eligible to claim deducation

• Section 80TTBhas been introduced by Finance Act, 2018 which is effective from F.Y 2018-19 in respect of interest on deposits in case of senior citizen.
• The deduction underSection 80TTBis allowed only to resident senior citizen i.e individual who is of the age of at least 60 years at any time during the previous year.
• The deduction is available for any interest income on deposits with the following:
  • Savings accounts in bank or banking companies
  • Savings accounts in post offices
  • Savings accounts in co-operative societies involved in banking business.
  • Interest on fixed deposit
  • Interest on time deposit
  • Any other interest
• The deduction on interest income earned is allowed up to Rs. 50,000 or amount of interest ,whichever is lower (from assessment year 2019-20) and is deductible from the gross total income of the taxpayer.
• Interest earned on account of saving bank account, fixed deposit or any other interest is considered as income under head “Income from other sources” and taxable as such. However no deduction is allowable to partner of firm , member of AOI or BOI in respect of interest income earned from any account held by or on behalf of firm, an association of person or body of individual.

What is the upper limit /maximum deduction under section 80C
As per thesection 80Cof the Act, the deduction is available only to an Individual or a Hindu Undivided Family (HUF) and deduction does not exceed Rs. 1,50,000 during a previous year. Taxpayer is eligible for deduction if contribution/deposits/investments / payment made during the previous year. Tax payer should made investments/deposits out of his taxable income or otherwise.
Who is eligible for claiming deduction under section 80C for payment of tuition Fees
Deduction for payment of Tuition fees is available only to an Individual assessee and not to a HUF assessee. The deduction is available for any sum paid as tuition feefor full time education of his/her children. The deduction can be claimed for the maximum of two children. Children shall include even adopted and step children.Furthermore, payment made for the education of himself/herself (Individual assesse) or spouse or any member of the HUF is not eligible for deduction undersection 80C. There is no defined age limit of children for claiming deduction of tuition fees.
What is the upper limit/maximum deduction available for Hindu Undivided Family (HUF) assessee under section 80D, i.e., for the payment made towards medical insurance
In the case of Hindu Undivided Family (HUF), deduction undersection 80Dcan be claimed as follows:
a) If the payment is made for medical insurance premium of any member of the HUF then deduction of Rs. 25,000 is allowed. In case the member for whom the premium is paid is a senior citizen or a very senior citizen ,then deduction of Rs. 30,000 (Rs. 50,000 from A.Y 2019-20) is allowed.
b) If the payment is made for medical expenditure for any member of the HUF then deduction of Rs. 30,000 (Rs. 50,000 from A.Y 2019-20) is allowed. This deduction is allowed with a condition that the payment is made for the treatment of a very senior citizen (senior citizen from A.Y 2019-20) provided that payment of medical insurance premium is not made by such person.
Further, as persection 80Dthe deduction provided under point a) and b) shall not exceed Rs. 30,000 (Rs. 50,000 from A.Y 2019-20).
Further in case of single premium health insurance policies having cover of more than one year, deductionu/s 80Dis allowed on proportionate basis for the number of years for which health insurance cover is provided to the extent of specified limit.