The Income-Tax Bill 2025, recently introduced in Lok Sabha, aims to streamline India’s direct tax structure. While it largely maintains existing provisions, it consolidates several sections, particularly those related to senior citizen tax benefits. This simplification is expected to make tax filing easier and more transparent.
A key change involves consolidating deductions for interest income. Previously, senior citizens could claim deductions under Section 80TTB, while others used Section 80TTA. The new bill consolidates these into Section 153.
Key Provisions for Senior Citizens under Section 153
- Deduction Limit: Senior citizens can claim a deduction of up to Rs 50,000 for interest earned from savings accounts and time deposits.
- Eligible Deposits: This includes interest from banks, post offices, and cooperative banks.
- Time Deposits Defined: The bill clarifies that time deposits include fixed deposits and Senior Citizen Savings Scheme (SCSS) accounts.
Positive and Negative Impacts of Budget 2025
Comparison with Other Taxpayers
| Category | Savings Account Interest Deduction | Time Deposit Interest Deduction |
| Senior Citizens | Up to Rs 50,000 | Up to Rs 50,000 |
| General Citizens/HUF | Up to Rs 10,000 | Not Allowed |
Furthermore, Section 153 clarifies that no deduction is allowed for interest earned from savings accounts held by firms, associations of persons, or bodies of individuals.
