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My father received 22 Lakhs of retirement fund and he invested 15 L in Post office Senior Citizens Savings Scheme (SCSS) and 7 L in Bank FD and other Small FD’s he had of 1.5 Lakhs. Could you please help me to understand the interest amount received from all saving scheme is Taxable or not ? How the Bank FD’s are taxable for Sr. citizen ?
I am confused to understand how this 15L SCSS can claim under 80C ?
An amount deposited under the Senior Citizens Savings Scheme Rules, 2004 is eligible for deduction under section 80C of Income Tax Act, 1961. You will be eligible to claim deduction of Rs 1.5 lakh under section 80C.
So, out of Rs 15 lakh invested amount, your father can claim tax deduction of Rs 1.5 lakh only u/ s 80c.
The interest income on Sr.CSS and Bank FDs is taxable.
But, the Budget 2018-19 has proposed to insert a new section 80 TTB so as to allow a tax deduction of up to Rs 50,000 in respect of interest income from deposits (Bank Deposits or deposits in Small Saving Schemes like Sr.CSS) held by senior citizens. This amendment is effective from Financial Year 2018-19 / Assessment Year 2019-20.
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Thanks for your reply, to be simplified I am calculating as below for FY 2018-19:
Earning from All Savings, Pensions and FD’s = Rs. 3,00,000 /-
Besides this Std. deduction allowed = 40,000/-
Any of the FD’s interest earning (80TTB) = 50,000/-
Post office SCSS can claim 1.5 Lakh as tax exemption under 80C.
Yes, you are correct!
You may go through below related articles ;
- Rs 40,000 Standard Deduction from FY 2018-19 | Does it really benefit the Salaried?
- Rs 50000 Standard Deduction from FY 2019-20 | What is the impact on your Taxable Income?
- Income Tax Deductions List FY 2018-19 | List of important Income Tax Exemptions for AY 2019-20