Section 80TTA vs 80TTB: The Interest Deduction Salaried Indians Get (and Often Don’t Claim)

Every year, banks credit savings account interest quietly into millions of Indian accounts. Rarely does anyone notice. And almost nobody declares it in their ITR.

Here’s what’s actually happening: your savings bank interest is taxable income. Banks do not deduct Tax Deducted at Source (TDS) on it. That’s the trap — no TDS means no 26AS entry, no automatic reminder, and no reason to think about it at filing time.

But here’s the flip side: Section 80TTA of the Income Tax Act lets you deduct up to ₹10,000 of that savings account interest every year — completely legitimately — if you’re under 60 and filing under the old tax regime. For a salaried person at the 30% slab, that’s ₹3,000 back in your pocket annually. For senior citizens, Section 80TTB raises the limit to ₹50,000 and covers fixed deposits too.

Most salaried Indians know about their 80C deductions. Far fewer know this one even exists — and even fewer actually claim it.

What Section 80TTA Actually Is

Section 80TTA of the Income Tax Act 1961 allows individuals and Hindu Undivided Families (HUFs) to deduct up to ₹10,000 a year from taxable income on interest earned from savings accounts.

To ground this in numbers: SBI, HDFC, and ICICI Bank all offer 2.5% per annum on savings accounts as of July 2026. For an account balance of ₹4 lakh, that’s exactly ₹10,000 in annual interest — right at the Section 80TTA ceiling. If your balance is higher or you have multiple accounts, your interest almost certainly exceeds ₹10,000.

The deduction applies to savings accounts held with:

• Commercial banks — public sector, private, and small finance banks
• Post Office Savings Accounts (earning 4% per annum as of April–June 2026, per the Ministry of Finance quarterly notification)
• Co-operative societies engaged in the banking business

The ₹10,000 limit applies to your combined savings interest across all accounts — not per account. Two savings accounts earning ₹6,000 and ₹7,000 give you ₹13,000 in total interest. You can deduct only ₹10,000. The remaining ₹3,000 is taxable at your applicable slab rate.

Who Can Claim Section 80TTA

Section 80TTA is available to:

• Individual taxpayers below 60 years of age
• Hindu Undivided Families (HUFs)
• Non-Resident Indians (NRIs) — but only on interest from Non-Resident Ordinary (NRO) savings accounts. Interest on Non-Resident External (NRE) accounts is already fully tax-exempt in India, so Section 80TTA does not apply to NRE accounts.

Who cannot claim Section 80TTA:

• Senior citizens aged 60 and above — they fall under Section 80TTB instead (covered below)
• Firms, partnership firms, AOP (Association of Persons), BOI (Body of Individuals), and companies
• Anyone filing under the new tax regime — addressed in detail in the section below

The Fixed Deposit Trap — What Section 80TTA Does NOT Cover

This is the most common misunderstanding around Section 80TTA, and it catches people out at filing time.

Section 80TTA covers savings account interest only. The Income Tax Act explicitly excludes what it calls “time deposits” — deposits repayable on the expiry of a fixed period. That means:

• Fixed deposits (FDs)
• Recurring deposits (RDs)
• Any other term deposit product

To make this concrete: Rajeev (illustrative example) has a savings account that earned ₹9,000 in interest during FY 2025-26, and a fixed deposit that earned ₹35,000.

Here’s how it plays out under the old regime:

• Total interest income declared under “Income from Other Sources”: ₹44,000
• Section 80TTA deduction: ₹9,000 (only the savings account interest qualifies)
• Taxable interest remaining after deduction: ₹35,000

If Rajeev is in the 20% tax slab, that’s ₹7,000 in tax on FD interest alone. Every rupee of FD interest is fully taxable for non-senior citizens. There is no separate exemption under Section 80TTA.

This is precisely why Section 80TTB was designed differently for senior citizens — it was built to cover all deposits, including FDs.

Section 80TTB — The Senior Citizen Upgrade

Section 80TTB was introduced through the Finance Act, 2018, effective from FY 2018-19, specifically for senior citizens. Compared to Section 80TTA, it is more generous in two significant ways.

First, the limit is five times higher: ₹50,000 instead of ₹10,000.

Second — and this matters more for most retired Indians — it covers all types of deposits, not just savings accounts.

Section 80TTB is available to resident individual senior citizens aged 60 years or above at any point during the relevant financial year. This includes super senior citizens (80 years and above). Both categories qualify for the same ₹50,000 limit.

The deduction applies to interest from:

• Savings accounts with banks, post offices, or co-operative societies
• Fixed deposits with banks, post offices, or co-operative societies
• Recurring deposits with banks, post offices, or co-operative societies

For many retired Indians, this is the section that matters most. Consider Meera (63, illustrative), who earns ₹42,000 a year in FD interest and ₹5,000 in savings account interest. Under Section 80TTB, her entire ₹47,000 in deposit interest falls within the ₹50,000 limit — fully sheltered from tax.

One rule that confuses families: Section 80TTA and Section 80TTB are mutually exclusive. Once you turn 60, Section 80TTA no longer applies to you. Section 80TTB takes over. You cannot claim both in the same year, and since 80TTB’s ₹50,000 limit is always more generous than 80TTA’s ₹10,000, senior citizens should always be filing under 80TTB — never 80TTA.

80TTA vs 80TTB: The Difference at a Glance

The New Tax Regime Problem

Neither Section 80TTA nor Section 80TTB is available under the new tax regime. Under Section 115BAC of the Income Tax Act 1961 — renumbered as Section 202 in the Income Tax Act 2025 — opting for the new regime means you give up most Chapter VI-A deductions, and 80TTA and 80TTB are part of that group.

Here’s what this costs you in real rupees.

For a salaried individual in the 20% bracket earning ₹15,000 in savings account interest:

• Old regime with 80TTA: (₹15,000 − ₹10,000) × 20% = ₹1,000 in tax on savings interest
• New regime: ₹15,000 × 20% = ₹3,000 in tax

Difference on this one deduction alone: ₹2,000.

For a senior citizen in the same 20% bracket with ₹50,000 in deposit interest across savings and FDs:

• Old regime with 80TTB: ₹0 tax (the entire ₹50,000 falls within the deduction limit)
• New regime: ₹50,000 × 20% = ₹10,000 in tax

That’s a ₹10,000 swing — on a single deduction. For retired individuals living partly on FD income, the old regime often wins clearly on the numbers once 80TTB is factored in.

This doesn’t mean the new regime is the wrong choice for everyone. For most salaried Indians who don’t have substantial deductions, the zero-tax threshold up to ₹12 lakh often outweighs what they’d gain from the old regime. But the evaluation should include 80TTA or 80TTB — not just 80C and 80D.

See the full breakdown in the old vs new tax regime comparison before you decide.

The 2026 Update — What Section 153 of the New Income Tax Act Means for You

India replaced the Income Tax Act 1961 with the new Income Tax Act 2025, which came into force on April 1, 2026. As part of this overhaul, Section 80TTA and Section 80TTB no longer exist as standalone provisions.

From Tax Year 2026-27 onwards, both have been merged and renumbered as Section 153 of the Income Tax Act 2025. This was confirmed in the Budget 2026 analysis published by Business Today in February 2026.

What has NOT changed under Section 153:

• The ₹10,000 limit for individuals/HUFs below 60 on savings account interest
• The ₹50,000 limit for resident senior citizens on all deposit interest
• The old-regime-only restriction
• The types of deposits covered
• The mutual exclusivity rule

What changed: only the section number in your ITR form, starting from Tax Year 2026-27.

For your July 2026 filing (covering FY 2025-26 income): nothing changes operationally. Your ITR-1 or ITR-2 will still have 80TTA and 80TTB fields as usual. Section 153 appears from next year’s filing onwards.

Think of Section 153 as a renamed container, not a reformed law. Same rules. New address.

How to Claim 80TTA or 80TTB in Your ITR

This is where most people leave money on the table — not because they don’t qualify, but because they don’t know where to enter it in the return.

Step 1: Gather your savings account interest for FY 2025-26. Log in to your bank’s net banking app and download your full-year account statement — April 1, 2025 to March 31, 2026. Look for entries labeled “savings interest credit” or “interest credited.” Do this for every savings account you hold, including old or dormant accounts that might still be earning interest.

Step 2: Collect all interest income for the year — savings and fixed deposits alike. You must declare all interest income under “Income from Other Sources,” regardless of whether you’re claiming 80TTA or 80TTB. Check your Annual Information Statement (AIS) on the Income Tax e-filing portal for TDS entries on FD interest. The gross amount — before any TDS deduction — is what goes into your return.

A note on the no-TDS trap: banks do not deduct TDS on savings account interest. Unlike FD interest — where TDS at 10% kicks in if annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens) — savings interest arrives in your account with no tax withheld and no 26AS entry. This makes it very easy to forget. The Income Tax Department’s AIS system does capture interest credits reported by banks, so if your return doesn’t match, an automated notice is likely.

Step 3: Report all interest income under “Income from Other Sources” in your ITR. In ITR-1 or ITR-2, this is a mandatory section separate from salary income. Enter your total annual interest here — savings interest, FD interest, RD interest — everything. Do not leave it blank because the amounts feel small.

Step 4: Claim the deduction in Chapter VI-A. In ITR-1 or ITR-2, the Chapter VI-A deductions section has dedicated fields for 80TTA and 80TTB. For 80TTA, enter the lower of: your actual savings account interest income or ₹10,000. For 80TTB (senior citizens), enter the lower of: your total deposit interest or ₹50,000.

Step 5: Cross-check with your AIS before submitting. Log in at incometaxindia.gov.in, go to Services → Annual Information Statement. Verify the savings interest figure listed there matches what you’re reporting. A mismatch between what you file and what banks reported to the department is one of the most common triggers for automated notices.

What to Do Right Now

1. Download your bank statements for FY 2025-26. Pull the full year (April 2025 to March 2026) from every savings account you hold — your salary account, old accounts, your post office savings account if you have one. Add up every interest credit.
2. Check your AIS on the Income Tax e-filing portal. Login at incometaxindia.gov.in → Annual Information Statement. Look at the “Interest from Savings Account” and “Interest from Deposits” sections. Any pre-filled amounts need to appear in your ITR.
3. Decide your tax regime — and know you can still switch at filing time. Even if you declared the new regime to your employer at the start of FY 2025-26, that is not final. Salaried individuals with no business income can switch to the old regime at the time of filing their ITR, pay any remaining tax due, and claim any TDS excess as a refund. Run the full comparison including 80TTA or 80TTB before deciding.
4. If you’re 60 or turned 60 during FY 2025-26 — file under 80TTB, not 80TTA. No special declaration is needed. Just claim 80TTB in the Chapter VI-A section of your ITR. The eligibility threshold is age at any point during the financial year.
5. File by July 31, 2026. A belated return attracts a late filing fee of ₹1,000 (if income is below ₹5 lakh) or ₹5,000 (above ₹5 lakh), plus interest on any tax due. Don’t miss the deadline over a return you put off for two weeks.

Disclaimer: All information in this article is based on publicly available data from the Income Tax Department of India, the Income Tax Act 1961, the Income Tax Act 2025, ClearTax, Business Today, and Upstox as of July 2026. Section references to 80TTA, 80TTB, and Section 153 are accurate as of the date of writing. Tax laws and their interpretation can change; always verify current provisions at incometaxindia.gov.in or through a qualified Chartered Accountant. This article is for general educational purposes only and does not constitute personalised tax or financial advice. Consult a SEBI-registered advisor or a practising CA for advice specific to your situation.

Sources: Section 80TTA of the Income Tax Act — Income Tax Department of India (incometaxindia.gov.in)  *  Section 80TTB of the Income Tax Act — Income Tax Department of India (incometaxindia.gov.in, May 2026)  *  FAQs on Section 80TTA and Section 80TTB — Income Tax Department (incometaxindia.gov.in)  *  Budget 2026: Deductions, Exemptions and Capital Gains Rules Under the New Income Tax Act (Business Today, February 1, 2026)  *  Section 80TTB Deduction for Senior Citizens (ClearTax, February 2026)  *  Savings Account Interest Rates for Senior Citizens — July 2026 (Upstox, July 8, 2026)  *  Post Office Time Deposit Interest Rates April–June 2026 (Upstox / Ministry of Finance, March 2026)

• Author
• Recent Posts

Follow me

Kunal Kundu

Kunal Kundu is a salaried professional from Pune, Maharashtra, with over 16 years of work experience. He has been investing since 2012 — starting with stocks and later expanding into mutual funds, options trading, and systematic tax planning.
He figured out most of what he knows about personal finance not from courses or advisors, but from years of reading, making mistakes, and fixing them. The Salary Investor is his attempt to save other salaried Indians the same time and money.
He is not a CA or a SEBI-registered advisor. He writes as a fellow salaried person who has been in the trenches — navigating EPF, ITR, 80C, salary slips, and market volatility.

Follow me

Latest posts by Kunal Kundu (see all)

• Flexi Pay Allowances in India: What You Can Actually Claim and What You Can’t (2026) - July 20, 2026
• How a Salary Increment Affects Your Tax Bracket — and What to Do in March Before the New Package Kicks In - July 19, 2026
• NSC vs SCSS vs Post Office FD: Which Government Scheme Wins for Conservative Investors in 2026? - July 18, 2026