A tax exemption is provided on the income up to Rs 50,000 from the interest earned by senior citizens from deposits.
Budget 2018 introduced Section 80TTB of the Income Tax Act, which provides tax exemption to senior citizens. Under this act, senior citizen as a resident individual aged 60 years or above during the financial year is eligible for Tax Deducted at Source (TDS) exemption up to Rs 50,000 from the total interest income earned during a financial year. It is only applicable to their deposits made with either in banks, co-operative societies, or in a post office. Interest received from any other sources such as from company Fixed Deposit, interest earned on bonds and debentures will not be eligible for deduction.