Section 80TTA vs 80TTB: Interest Income Deductions Explained
- PRITI SIRDESHMUKH
- Nov 10, 2025
- 10 min read
Sections 80TTA and 80TTB of the Income Tax Act, 1961, help taxpayers save tax on interest income. While both provide relief, their eligibility criteria and deduction limits differ significantly. Section 80TTA benefits resident individuals and HUFs under 60 years with up to ₹10,000 deduction on savings account interest, whereas Section 80TTB is designed for senior citizens, offering deductions up to ₹50,000 on both savings and fixed deposit interest. Understanding the distinction ensures accurate filing and maximized tax benefits for the right age category.
Table of Contents
What Is Section 80TTA Under the Income Tax Act?
Section 80TTA of the Income Tax Act, 1961, allows a deduction on interest earned from savings accounts. This benefit is available to resident individuals below 60 years of age and Hindu Undivided Families (HUFs). The maximum deduction allowed under this section is ₹10,000 per financial year. Interest earned from savings accounts maintained with banks, cooperative banks, and post offices qualifies for this deduction.
However, it is important to note that this section covers only interest from savings accounts. Any interest income from fixed deposits, recurring deposits, or time deposits is excluded. The deduction is claimed under the head “Income from Other Sources,” and if the total interest is less than ₹10,000, the actual amount earned can be claimed as a deduction.
What Is Section 80TTB Under the Income Tax Act?
Section 80TTB provides additional tax relief specifically for resident senior citizens aged 60 years or above. Introduced in the Union Budget 2018, this section extends the benefit of deduction to a wider range of interest income compared to Section 80TTA. Under Section 80TTB, senior citizens can claim a deduction of up to ₹50,000 per financial year on interest earned from savings accounts, fixed deposits, and recurring deposits held in banks, post offices, or cooperative banks.
This provision ensures that senior citizens, who rely heavily on interest income for their regular expenses, get a higher level of tax exemption. However, once a senior citizen claims the deduction under Section 80TTB, they cannot claim benefits under Section 80TTA for the same year. The section excludes interest earned from company fixed deposits, bonds, or NBFC deposits.
Section 80TTA vs 80TTB: Key Differences Explained
While both sections provide deductions on interest income, their applicability and limits differ. Section 80TTA is designed for individuals below 60 years and HUFs, whereas Section 80TTB applies exclusively to senior citizens. Section 80TTA offers a maximum deduction of ₹10,000 per financial year, covering only savings account interest. On the other hand, Section 80TTB allows up to ₹50,000 deduction and includes interest from savings, fixed, and recurring deposits.
Another major difference lies in scope and replacement — once a taxpayer becomes eligible for Section 80TTB, they cannot claim Section 80TTA simultaneously. The intent of these sections is to promote savings and provide relief on passive income from deposits without complicating the filing process.
Eligibility Criteria for Claiming Section 80TTA and 80TTB
To claim deductions under these sections, specific conditions must be satisfied:
Section 80TTA Eligibility:
Available to resident individuals below 60 years and HUFs.
Interest must be from a savings account in a bank, cooperative bank, or post office.
The account should be held in the taxpayer’s name or jointly, with interest apportioned accordingly.
Non-resident Indians (NRIs) are not eligible.
Section 80TTB Eligibility:
Applicable only to resident senior citizens (aged 60 years or above).
Interest can be from savings, fixed, or recurring deposits.
The total deduction allowed is capped at ₹50,000 per year.
NRIs and non-senior individuals cannot claim this benefit.
How to Calculate Deduction Under Section 80TTA
The deduction calculation under Section 80TTA is simple. A taxpayer must first determine the total interest earned from all savings accounts during the financial year. If the total interest is less than ₹10,000, the actual amount can be claimed as deduction. If it exceeds ₹10,000, only ₹10,000 can be claimed.
For example, if a taxpayer earns ₹8,500 in savings interest, the deduction equals ₹8,500. If the total interest is ₹15,000, only ₹10,000 can be deducted, and the remaining ₹5,000 is taxable. Fixed and recurring deposit interest must not be included in this computation.
How to Calculate Deduction Under Section 80TTB
For senior citizens, the deduction under Section 80TTB covers interest earned from multiple types of deposits. The total interest income from all eligible savings, fixed, and recurring deposits is aggregated. The maximum deduction that can be claimed is ₹50,000 per financial year.
For instance, if a senior citizen earns ₹20,000 from savings deposits and ₹40,000 from fixed deposits, the total interest of ₹60,000 will be considered. The maximum deduction remains capped at ₹50,000, while the balance ₹10,000 becomes taxable. This calculation helps senior citizens reduce taxable income effectively.
Is Section 80TTA Allowed in the New Tax Regime?
No, Section 80TTA deductions are not allowed under the new tax regime introduced under Section 115BAC. The new regime provides lower tax rates but eliminates most exemptions and deductions, including those under Chapter VI-A such as 80TTA. Taxpayers who wish to claim this deduction must opt for the old regime while filing their ITR.
Is Section 80TTB Allowed in the New Tax Regime?
Similar to Section 80TTA, deductions under Section 80TTB are not available under the new tax regime. Senior citizens who choose the new regime will not be able to claim the ₹50,000 interest deduction benefit. Therefore, those with significant interest income often prefer the old regime to avail the higher deduction and reduce overall tax liability.
How to Claim Section 80TTA or 80TTB Deduction in ITR Filing
To claim the deduction, taxpayers must first compute their total interest income from eligible accounts and report it under the head “Income from Other Sources” in the income tax return form. After this, they can claim the respective deduction—₹10,000 under Section 80TTA or ₹50,000 under Section 80TTB—under Chapter VI-A.
Digital tax platforms like TaxBuddy simplify this process by automatically categorizing interest income, verifying eligibility, and applying the correct deduction limit. This reduces the risk of errors and ensures compliance with the latest tax rules.
Latest CBDT Updates on Section 80TTA and 80TTB for FY 2024–25
The Central Board of Direct Taxes (CBDT) has reiterated that a taxpayer cannot claim both 80TTA and 80TTB in the same financial year. Updated filing utilities for FY 2024–25 ensure that deductions under both sections are validated automatically. CBDT also emphasizes accurate declaration of bank interest income to prevent mismatches with AIS data.
Tax platforms such as TaxBuddy have incorporated these updates into their AI-driven systems, ensuring automatic interest mapping and smooth deduction processing during e-filing.
Common Mistakes While Claiming Interest Income Deductions
Many taxpayers commit small yet impactful mistakes when claiming these deductions. Some of the most common ones include:
Including fixed deposit interest under 80TTA (which is not eligible).
Claiming both 80TTA and 80TTB in the same year.
Forgetting to include post office savings account interest.
Ignoring the deduction limit and declaring the entire interest as exempt.
Not cross-verifying interest income with bank statements and AIS.
Ensuring accurate classification of interest income prevents ITR discrepancies and potential notices from the department.
How TaxBuddy Simplifies 80TTA and 80TTB Deductions
TaxBuddy simplifies the process of claiming 80TTA and 80TTB deductions through automation and expert guidance. When users upload Form 16 or bank statements, the platform automatically identifies eligible interest income, applies the correct deduction, and assigns it under the right section.
For senior citizens, TaxBuddy ensures 80TTB is prioritized, avoiding duplication errors. Its intelligent system also validates data with AIS and Form 26AS, helping taxpayers file accurately and avoid penalties. By combining AI efficiency with professional review, TaxBuddy ensures a seamless and compliant filing experience.
Conclusion
Both Section 80TTA and Section 80TTB offer valuable opportunities to save tax on interest income. While 80TTA benefits individuals and HUFs below 60 years, 80TTB provides broader coverage for senior citizens with higher deduction limits. Choosing the right section based on eligibility ensures optimized savings and compliant filing.
For those seeking an efficient way to file returns and claim eligible deductions, it is advisable to use a trusted platform. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides flexibility through two filing modes — self-filing and expert-assisted filing. The self-filing plan is ideal for individuals who are comfortable handling their returns but want the assurance of AI-powered error detection. It auto-fills data from documents like Form 16, bank statements, and AIS to minimize manual effort. The expert-assisted plan, on the other hand, is suited for taxpayers with complex situations such as capital gains, multiple income sources, or foreign assets. In this plan, a qualified tax professional reviews the entire return, applies the correct deductions like Sections 80TTA and 80TTB, and ensures accurate filing with post-filing support.
Q2. Which is the best site to file ITR?
The official Income Tax Department portal remains the statutory platform for e-filing, but many taxpayers prefer using platforms like TaxBuddy for a smoother experience. TaxBuddy combines automation, AI validation, and human expertise, making it one of the best online ITR filing platforms in India. Its interface is user-friendly, offering real-time TDS validation, auto-calculation of eligible deductions, and instant error detection. It also helps optimize deductions under various sections, including 80TTA and 80TTB, to ensure that taxpayers don’t miss out on legitimate tax benefits.
Q3. Where to file an income tax return?
An income tax return can be filed in two ways — through the government’s e-filing portal (incometax.gov.in) or via third-party tax platforms like TaxBuddy. The official portal provides the basic structure for compliance, while TaxBuddy offers a guided experience, especially for those unfamiliar with tax laws. It simplifies return filing by automatically fetching data from AIS, Form 26AS, and Form 16, while ensuring accurate classification of income and deductions. This approach helps individuals file their returns confidently without technical errors or missed claims.
Q4. Can both Section 80TTA and 80TTB be claimed in the same financial year?
No, both deductions cannot be claimed together. A taxpayer can only claim one of these sections based on eligibility. Individuals below 60 years and HUFs can claim deductions under Section 80TTA for up to ₹10,000 on savings account interest. However, once a taxpayer turns 60 and qualifies as a senior citizen, Section 80TTB applies, offering up to ₹50,000 deduction on savings and deposit interest. Senior citizens claiming 80TTB cannot simultaneously claim 80TTA for the same financial year. The Income Tax Department automatically cross-verifies such claims during return processing to prevent duplication.
Q5. Is recurring deposit interest covered under Section 80TTA?
No, interest earned from recurring deposits (RDs) or fixed deposits (FDs) does not qualify for deduction under Section 80TTA. This section applies only to savings account interest. However, under Section 80TTB, senior citizens can claim deductions on interest from both savings and time deposits, including RDs and FDs held with banks, cooperative banks, or post offices. Therefore, individuals below 60 years cannot claim any deduction for interest from RDs or FDs under 80TTA, whereas senior citizens get broader coverage under 80TTB.
Q6. Are NRIs eligible to claim these deductions?
No, both Section 80TTA and Section 80TTB are exclusively available to resident individuals and Hindu Undivided Families (HUFs). Non-Resident Indians (NRIs) are not eligible to claim these deductions, even if they maintain savings accounts in India. Interest earned on NRO accounts, though taxable, cannot be claimed under either section. However, NRIs can explore benefits under Double Taxation Avoidance Agreements (DTAA) depending on their country of residence. Resident taxpayers should ensure their residential status is correctly reported in their ITR to avoid rejection of such deductions.
Q7. How do I claim interest income deductions in my ITR?
To claim interest income deductions, taxpayers should first aggregate interest earned from all eligible accounts during the financial year. This total should be reported under the head “Income from Other Sources” in the ITR form. The deduction is then claimed under Chapter VI-A by selecting either Section 80TTA (for non-seniors) or Section 80TTB (for senior citizens). It’s important to retain bank interest certificates or account statements for verification. Filing through platforms like TaxBuddy automates this process — it identifies eligible income, applies the correct deduction limit, and ensures accurate reflection in the return without manual calculation errors.
Q8. Is 80TTA allowed under the new tax regime?
No, Section 80TTA deductions are not available under the new tax regime (Section 115BAC). The new regime provides lower tax rates but removes most exemptions and deductions under Chapter VI-A, including those under Section 80TTA. Taxpayers choosing the new regime must forgo this deduction. Those who have significant savings interest and wish to claim this benefit should opt for the old regime while filing their return. TaxBuddy’s tax calculator helps compare both regimes to determine which option yields better overall savings.
Q9. Is 80TTB available under the new tax regime?
Similar to Section 80TTA, deductions under Section 80TTB are also not permitted in the new tax regime. Senior citizens opting for the new regime cannot claim the ₹50,000 deduction on interest income. However, since the new regime features reduced slab rates and a higher basic exemption threshold for senior citizens, some may still find it beneficial despite losing this deduction. TaxBuddy’s regime comparison tool evaluates both options side by side, ensuring senior citizens choose the most tax-efficient structure for their income pattern.
Q10. Can I claim 80TTA for a joint account?
Yes, a deduction can be claimed for a joint account, but only by the eligible holder whose income is being assessed. If the account is held jointly with another person, the deduction is available only to the taxpayer who actually owns and reports the interest income in their return. For instance, if a parent and child hold a joint account and the parent receives the interest, only the parent can claim the 80TTA or 80TTB deduction, depending on their age. Incorrect allocation or double-claiming can trigger discrepancies during AIS matching, leading to potential ITR notices.
Q11. What is the maximum deduction under 80TTB?
The maximum deduction under Section 80TTB is ₹50,000 per financial year. This limit covers the total interest earned from all eligible deposits, including savings, fixed, and recurring deposits with banks, cooperative banks, and post offices. If the total interest earned during the year exceeds ₹50,000, only ₹50,000 can be deducted, and the balance becomes taxable. This provision was introduced to provide senior citizens additional relief, as they often rely on interest income for their regular expenses. The deduction is applied per taxpayer, not per account, meaning multiple accounts do not increase the total deduction limit.
Q12. Does TaxBuddy automatically apply these deductions?
Yes, TaxBuddy’s intelligent tax filing platform automatically identifies eligible deductions under Sections 80TTA and 80TTB. When a user uploads Form 16, AIS, or bank interest certificates, the system reads the data, segregates interest income, and applies the appropriate deduction limit based on age and eligibility. It also checks for overlaps, ensuring a senior citizen doesn’t claim both 80TTA and 80TTB in the same year. This automation prevents errors, ensures compliance, and saves time. Additionally, users can consult TaxBuddy’s experts for personalized guidance to maximize deductions and optimize overall tax savings efficiently.
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