National Savings Certificate Income (Budget 2022 Expectations): The Institute of Chartered Accountants of India (ICAI) has suggested the Government to bring income from the National Savings Certificate (NSC0 under the ambit of Section 80TTB of the Income Tax Act.
“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 in its Pre-Budget 2022-23 memorandum
Section 80TTB provides for deduction up to RS 50,000 in respect of interest income on deposits made by senior citizens. The Section was inserted by Finance Act 2018.
ICAI noted that Section 80 TTB “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.”
The section provides benefits to senior citizens whose main source of income is interest from bank deposits. ICAI suggested that the Section should also provide benefits to senior citizens on the interest income from National Savings Certificate. As the NSCs are used as a savings option by a large number of senior citizens.
“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 said.