Budget 2021: ICAI said that bringing NSC interest income under Section 80TTB will greatly benefit the senior citizens whose main source of income is generally from interest income.
Union Budget 2021: What is in store for the senior citizens in Budget 2021? The answer to this question will be known on Monday (February 1). But in the run-up to the Budget presentation by Finance Minister Nirmala Sitharaman, expectations are high. In its pre-Budget memorandum, the Institute of Chartered Accountants of India (ICAI) has suggested the government that the interest income benefit up to Rs 50,000 provided to senior citizens under Section 80TTB should be extended to income received from investment in the National Savings Certificate.
NSC is one of the safest investment options widely used by senior citizens. Explaining the reason for such suggestion, the ICAI said that The Finance Act 2018 inserted a new section 80TTB to allow a deduction up to Rs 50,000 in respect of interest income on deposits made by senior citizens.
“The aforesaid new section, inter alia, provides that where the gross total income of an assessee, being a senior citizen, includes any income by way of interest on deposits with a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act) or a co-operative society engaged in the business of banking (including a co-operative land mortgage bank or a co-operative land development bank) or a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898, a deduction of an amount up to Rs. 50,000 shall be allowed,” ICAI said.
ICAI said that bringing NSC interest income under Section 80TTB will greatly benefit the senior citizens whose main source of income is generally from interest income.
“It is pertinent to mention that another main source of income for senior citizens is interest income on National Savings Certificate which can be purchased from Post Offices in India. In order to extend the benefit of provisions of section 80TTB to senior citizens, it is recommended that interest income arising to Senior Citizens on National savings Certificate may also be included within the ambit of section 80TTB,” ICAI noted.
What ICAI suggested
“It is suggested that income by way of interest on National Savings Certificate also be included within the ambit of provisions of section 80TTB, so that senior citizens who have purchased NSCs from post offices are also able to avail the benefit of enhanced deduction under section 80TTB,” ICAI said.