Section: 194A
Introduction: Any Person (not being an individual or a HUF) who is responsible for paying to a resident any income by way of interest other than income chargeable as interest on securities is required to deduct income -tax thereon at the rates in force
Non-Applicability: One of the exceptions when tax is not deductible is as follows:
No tax deduction if interest does not exceed a specified amount:
| Sr. No. | Payer | Interest is payable on | From 01/06/2007 to 31/03/2018 | w.e.f. 01/04/2018 | |
| Payee – Sr. Citizen | Payee – Any Other Person | ||||
| 1. | Banks | Time Deposit | Rs. 10,000 | 50,000 | 10,000 |
| 2. | Co-operative Society | Time Deposit | Rs. 10,000 | 50,000 | 10,000 |
| 3. | Post Office | Notified Scheme (i.e. Senior Citizen Saving Scheme, 2004) | Rs. 10,000 | 50,000 | 10,000 |
| 4. | Any Other | – | 5,000 | 5,000 | 5,000 |
A.Y. 2019-20
Section: 80TTB
Introduction: If the assessee has interest income as given above in exceptions of section 194A, he shall be eligible to claim deduction which is equal to
1. Rs. 50,000 or
2. The aforesaid interest, whichever is lower
Applicability: Senior Citizen i.e. Individual age of 60 years and above
A.Y. 2019-20
Conclusion:
Section 194A amended on not to deduct TDS on interest income upto Rs. 50,000 for Senior Citizen &
Section 80TTB introduced that such user can claim deduction of Rs. 50,000 or Interest Income whichever is lower