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Major relief to senior citizens, no TDS on interest income upto Rs. 50,000

Central Board of Direct Taxes (CBDT) has issued a notification dated 06/12/2018 clarifying that no TDS is to be deducted by the banks u/s 194A if the interest income in a single financial year does not exceed Rs 50,000 for senior citizens. This clarification will come as a relief for the senior citizens whose interest income does not exceed the threshold limit of Rs 50,000 but banks were wrongly deducting TDS. The previous limit of TDS deduction was Rs 10,000 in a single financial year irrespective of the age of the individual taxpayer. 

Budget 2018 has introduced new section called Section 80TTB under the Income Tax Act allowing individuals aged 60 years and above to claim deduction upto Rs. 50,000 of interest income from deposits with either banks, co-operative societies or a post office from their gross total income before levy of tax. 

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