Section 80TTA Deduction: Claim Up to ₹10,000 on Savings Interest (FY 2024-25)
- Farheen Mukadam
- Aug 31
- 7 min read
Section 80TTA of the Income Tax Act provides a simple way to lower your tax bill. It allows you to claim a deduction of up to ₹10,000 on the interest you earn from your savings accounts. This guide explains who can claim this benefit for the Assessment Year 2025-26, what the limits are, and how it differs from Section 80TTB. It's important to remember that the 80TTA deduction is only available to taxpayers who choose the Old Tax Regime.
Key Takeaways
What it is: A tax deduction on the interest earned from savings accounts.
Maximum Limit: You can claim up to ₹10,000 per year.
Who can claim: Individuals (who are not senior citizens) and Hindu Undivided Families (HUF) can claim this.
Tax Regime: It is available only if you file your taxes under the Old Tax Regime.
Not for: This deduction does not apply to interest from Fixed Deposits (FDs), Recurring Deposits (RDs), or for senior citizens, who have a separate, more beneficial section (80TTB).
Table of Content
Who is Eligible to Claim Deduction Under Section 80TTA?
The 80TTA eligibility criteria clearly define who can benefit from this tax deduction. This deduction is specifically for Individuals and Hindu Undivided Families (HUF). It aims to provide relief to taxpayers who are below the age of 60. Senior citizens, who are 60 years or older, cannot use this section; they must use Section 80TTB, which offers a higher deduction limit. The 80TTA for HUF allows the family entity to claim the deduction on its savings account interest. The 80TTA for NRI is also applicable, which is a helpful provision for non-residents earning interest in India.
Eligibility Criteria Checklist
Here is a straightforward checklist to see if you can claim the 80TTA deduction.
✅ An Individual (aged below 60) or a Hindu Undivided Family (HUF). ✅ Filing your return under the Old Tax Regime. ✅ You have earned interest from a savings account. ❌ You are a Senior Citizen (aged 60 or above) - You should claim under Section 80TTB. ❌ You are a firm, company, or any other association of persons.
Special Note for Non-Resident Indians (NRIs)
Many people ask who can claim 80TTA, and it's good to know that NRIs are included. An NRI can claim the deduction on interest earned from a Non-Resident Ordinary (NRO) savings account. Interest earned in a Non-Resident External (NRE) account is already tax-exempt in India, so the 80TTA deduction does not apply to it. This specific rule helps NRIs reduce their taxable income in India.
What is the Maximum Deduction Limit under 80TTA?
The maximum deduction limit under 80TTA is a fixed amount. You can claim a deduction of up to a maximum of ₹10,000 on the interest income you earn in a financial year. This 80TTA limit applies to the cumulative interest from all your savings accounts combined, including those with banks, cooperative societies, or post offices.
For example:
If your total savings interest for the year is ₹8,000, you can claim the entire ₹8,000 as a deduction.
If you earn ₹15,000 in interest, your deduction is capped at the maximum deduction 80TTA allows, which is ₹10,000. The remaining ₹5,000 will be taxed as per your income slab.
This makes it a straightforward and valuable deduction for many taxpayers.
What Interest Income is Covered (and What Isn't)?
A common question is about the interest on savings accounts and what else qualifies. The 80TTA deduction is very specific about the types of interest allowed. It strictly covers interest from savings accounts. Many people wonder about 80TTA on fixed deposit interest, but it's crucial to know that it is not covered. Similarly, the rules for 80TTA on recurring deposit interest also state that it is not eligible for this deduction.
The table below gives a clear picture.
✅ Interest Allowed Under 80TTA | ❌ Interest NOT Allowed Under 80TTA |
Interest from a Savings Account with a Bank | Interest from Fixed Deposits (FDs) |
Interest from a Savings Account with a Cooperative Society | Interest from Recurring Deposits (RDs) |
Interest from a Savings Account with a Post Office | Interest from corporate bonds or debentures |
| Any other Time Deposit interest |
Section 80TTA vs. 80TTB: Comparison
The difference between 80TTA and 80TTB is a frequent point of confusion for taxpayers. Section 80TTB is a special provision created exclusively for resident senior citizens (those aged 60 and above). The 80TTA vs 80TTB comparison shows that 80TTB offers a much higher deduction limit and covers more types of interest, including from fixed and recurring deposits. An individual can only claim one of these deductions, not both.
Here is a detailed comparison to clear things up:
Feature | Section 80TTA | Section 80TTB |
Applicable To | Individuals (< 60 years) & HUF | Resident Senior Citizens (≥ 60 years) |
Deduction Limit | Up to ₹10,000 per year | Up to ₹50,000 per year |
Eligible Interest | Savings Account interest ONLY | Savings Account, Fixed Deposits (FDs), Recurring Deposits (RDs) interest |
Source of Interest | Banks, Post Offices, Co-operative Societies | Banks, Post Offices, Co-operative Societies |
How to Claim 80TTA in ITR: A Step-by-Step Guide for AY 2025-26
Knowing how to claim 80TTA is a simple, two-step process that can save you money. To claim 80TTA in your ITR, you must first report the total interest income and then claim the eligible amount as a deduction. It is essential to report this correctly to ensure your tax return is accurate. Here is a guide on where to show 80TTA in ITR.
Step 1: Calculate Your Total Savings Interest First, gather all your bank statements, passbooks, or check your Annual Information Statement (AIS) on the official Income Tax e-Filing portal. Sum up the interest earned from every savings account you hold for the financial year.
Step 2: Report Total Interest Income In your Income Tax Return (ITR) form, navigate to the schedule named 'Income from Other Sources'. You must report the entire interest amount you calculated in Step 1 here. It’s a common mistake to report only the amount after the deduction; always report the gross interest first.
Step 3: Claim the Deduction After reporting the income, proceed to the 'Deductions under Chapter VI-A' section of the ITR. This is where you will find fields for various deductions.
Step 4: Enter the Deduction Amount Look for the row corresponding to Section 80TTA. Here, you will enter the total interest amount you earned or ₹10,000, whichever is lower. The system will automatically cap the deduction at this limit.
Step 5: Verify and File The deduction you claimed will now be subtracted from your Gross Total Income, lowering your final taxable income. Review your entire return one last time to ensure all details are correct, and then proceed to file your ITR.
If this process feels overwhelming, you can Simplify your tax filing with Taxbuddy's ITR filing services.
Advanced Topics
Old Tax Regime vs. New Tax Regime: Where Does 80TTA Fit?
The 80TTA new tax regime question is a critical one for taxpayers. The deduction under Section 80TTA is not available if you choose to file your taxes under the New Tax Regime. The new regime was designed to offer lower income tax slab rates in exchange for giving up most of the deductions and exemptions available under the old regime. Therefore, to claim the 80TTA deduction, you must opt for the Old Tax Regime.
Important: Section 80TTA is not available under the New Tax Regime.
Conclusion: Maximize Your Savings with Section 80TTA
Section 80TTA offers a straightforward way for individuals (below 60) and HUFs to reduce their tax liability. This simple deduction allows you to save tax on up to ₹10,000 of interest earned from savings accounts, provided you file under the old tax regime. Remembering to first include all interest income under 'Income from Other Sources' and then claiming the deduction under Chapter VI-A is the key to using this benefit correctly. It's a small step that makes saving money just a little more rewarding.
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Frequently Asked Questions (FAQs)
Can I claim a deduction for Fixed Deposit (FD) interest under 80TTA?
No, the deduction under Section 80TTA is only for interest from savings accounts. Interest from FDs and RDs is fully taxable and not eligible under this particular section.
Is there a limit on the number of bank accounts?
No, there is no restriction on the number of savings accounts you can have. The ₹10,000 deduction limit applies to the total interest you earn from all your savings accounts put together.
What happens if my interest income is more than ₹10,000?
If your interest income exceeds ₹10,000, you can claim the maximum deduction of ₹10,000. Any interest earned above this amount will be added to your total income and taxed according to your applicable slab rate.
Can my spouse and I both claim ₹10,000?
Yes, absolutely. The 80TTA deduction is available to each individual taxpayer. If you and your spouse both have separate savings accounts and earn interest, you can each independently claim a deduction of up to ₹10,000.
I am a senior citizen. Can I claim 80TTA?
No, senior citizens (60 years and above) cannot claim the deduction under 80TTA. They should claim deductions under Section 80TTB, which provides a higher limit of up to ₹50,000 and covers interest from fixed and recurring deposits as well.
Is the 80TTA deduction over and above the Section 80C limit?
Yes, the deduction under Section 80TTA is completely separate from the ₹1.5 lakh limit under Section 80C. This makes it an additional tax-saving benefit.
Do I need to submit any proof to claim the 80TTA deduction?
You do not need to upload or submit any documents while filing your ITR. However, it is important to keep your bank statements and interest certificates safe in your records. The tax department may ask for them as proof if your return is selected for scrutiny.
What if I forget to report interest income?
It is mandatory to report all your income, including savings account interest. Failing to report any income can result in penalties and will attract interest on the tax that was due.
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