To encourage savings and reduce the tax burden on small interest incomes, the Income Tax Act provides deductions on interest earned from savings bank accounts and fixed deposits under Section 80TTA and Section 80TTB.

• Section 80TTA: Available to individuals and HUFs (except senior citizens) for interest on savings account.
• Section 80TTB: Specifically for resident senior citizens (aged 60 or more), providing a higher deduction limit and includes both savings and fixed deposits.

👉 These deductions are available under the old tax regime only. If you opt for the new tax regime under Section 115BAC, these are not available.

🔹 Section 80TTA – Deduction for Interest on Savings Account

✅ Eligibility:

• Available to Individuals and HUFs
• Not applicable to Senior Citizens (they claim deduction under Section 80TTB)
• Only if you opt for Old Tax Regime

✅ Qualifying Accounts:

• Savings accounts held in:
  • Banks
  • Post Offices
  • Co-operative societies engaged in banking

✅ Deduction Limit:

• Maximum deduction: ₹10,000 per year
• If interest earned is less than ₹10,000, then only actual interest is deductible.

✅ What’s not covered:

• Interest on Fixed Deposits or Recurring Deposits
• NRO accounts (for NRIs)

🔹 Section 80TTB – Deduction for Senior Citizens

✅ Eligibility:

• Applicable only to Resident Individuals aged 60 years or more
• Available only under the Old Tax Regime

✅ Covered Income:

• Interest on:
  • Savings account
  • Fixed deposits
  • Recurring deposits
• Held with:
  • Banks
  • Co-operative banks
  • Post Offices

✅ Deduction Limit:

• Maximum deduction: ₹50,000 per year
• If actual interest income is less than ₹50,000, only that amount is allowed.

Step-by-Step Process to Claim

1. Calculate your total interest income from eligible sources.
2. Report the full interest income under the head “Income from Other Sources” in your ITR.
3. Under Chapter VI-A, claim the eligible deduction under:
   • Section 80TTA if you’re below 60 years.
   • Section 80TTB if you’re a resident senior citizen.
4. Ensure that:
   • Your total deduction does not exceed the specified limit.
   • You are filing under the Old Tax Regime.

Documents to Maintain

To safely claim the deduction and face no issues during scrutiny:

• Interest certificates from banks/Post Office
• Passbook entries or bank statements
• Form 26AS or Annual Information Statement (AIS) to cross-verify

Comparison Table – 80TTA vs 80TTB

Example –

 Mr. Arjun (Age 35):

• Savings interest = ₹11,000
• Deduction under 80TTA = ₹10,000
• Taxable interest = ₹1,000

Mrs. Shanti (Age 68):

• FD interest = ₹40,000
• Savings interest = ₹12,000
• Total interest = ₹52,000
• Deduction under 80TTB = ₹50,000

Taxable interest = ₹2,000