Deduction on interest income.
Eligible deduction
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Tax saved
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Your breakdown
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Two sections, decided by your age
These are sibling deductions that you choose between based purely on age. If you are below 60, Section 80TTA lets you deduct up to ₹10,000 of interest earned on savings bank accounts. The moment you turn 60, you stop using 80TTA and switch to Section 80TTB, which is far more generous: up to ₹50,000 of interest, and importantly it covers all deposit interest, including fixed deposits and recurring deposits, not just savings accounts. You cannot claim both in the same year.
The scope difference is the crux. Under 80TTA, only savings-account interest counts; the interest on your fixed deposits is fully taxable. Under 80TTB, FD interest joins the pool, which is exactly the income most retirees live on. Budget 2025 did not change either deduction limit, so for FY 2025-26 the figures remain ₹10,000 and ₹50,000.
Worked example: a non-senior with ₹35,000 of savings interest
Take someone under 60 in the 20 percent slab whose savings accounts paid ₹35,000 of interest in FY 2025-26. The 80TTA cap limits the deduction sharply.
Only ₹10,000 of the ₹35,000 is shielded; the other ₹25,000 is taxed at slab. Had this person been a senior citizen, the same ₹35,000 would fall entirely within the ₹50,000 80TTB ceiling and be fully deductible. The chart shows the gulf between the two caps, which is one of the larger age-based jumps in the Act.
The ₹50,000 deduction is not the ₹1 lakh TDS threshold
Here is a confusion I see constantly, and Budget 2025 made it worse. The Budget raised the TDS threshold on interest paid to senior citizens under Section 194A to ₹1 lakh, up from ₹50,000. That is the point at which a bank must start deducting tax at source. It is not the same as the 80TTB deduction, which stays at ₹50,000. So a senior can have the bank deduct no TDS up to ₹1 lakh of interest, yet still only deduct ₹50,000 of it from taxable income under 80TTB. The remaining ₹50,000 is taxable even though no TDS was cut. Do not assume that because the bank withheld nothing, the interest is tax-free.
Does FD interest qualify under 80TTA?
No. 80TTA is strictly for savings-account interest. Fixed-deposit and recurring-deposit interest do not qualify for those under 60. Only senior citizens, through 80TTB, get a deduction that also covers FD interest. This is the single biggest reason the senior-citizen benefit is so much larger in practice.
Are these deductions available in the new regime?
No. Both 80TTA and 80TTB are old-regime deductions. If you are on the new regime for FY 2025-26, your savings and deposit interest is taxed in full with no carve-out, so retirees with significant interest income should check whether the old regime plus 80TTB leaves them better off.
Add up interest across every account first
The cap applies to your total qualifying interest, not per bank. So sum the interest from all your savings accounts before applying the ₹10,000 limit under 80TTA, or all your deposit accounts before the ₹50,000 limit under 80TTB. People with three or four accounts often report just one bank’s interest and miss the rest, which understates income and can trigger a mismatch with the Annual Information Statement the department already holds. Pull your AIS and the interest certificates from each bank, total them, then apply the single ceiling.
A small practical tip on TDS forms. A non-senior cannot file Form 15G to stop TDS on FD interest unless total income is below the taxable threshold, and FD interest is fully taxable for them anyway since 80TTA does not cover it. Senior citizens, by contrast, can file Form 15H if their net tax liability is nil, and with the 80TTB deduction and the higher basic exemption many genuinely fall below the line. Filing 15H where eligible saves the hassle of claiming a TDS refund later.
Does interest from a post office or co-operative bank count?
Yes. Savings interest from a post office account or a co-operative society engaged in banking qualifies under 80TTA for those under 60. For senior citizens, 80TTB similarly covers deposits with banks, co-operative banks, and the post office, including the popular Senior Citizen Savings Scheme interest, all within the ₹50,000 ceiling.