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Section 80TTA of Income Tax Act: Deduction on Savings Account Interest

Section 80TTA allows an eligible individual or Hindu undivided family to deduct up to Rs. 10,000 of qualifying interest earned on savings accounts, subject to the conditions of the Income-tax Act, 1961.

Updated: 28 September 2026

At a glance: The deduction is limited to eligible savings account interest. It does not cover time deposits such as fixed deposits. An individual covered by Section 80TTB cannot claim Section 80TTA. For taxpayers using the default new tax regime under Section 115BAC, Section 80TTA is generally not available; it is relevant when the old tax regime is validly chosen.

What is Section 80TTA?

Section 80TTA is part of Chapter VI-A of the Income-tax Act, 1961. It provides a deduction where the gross total income of an eligible assessee includes interest on deposits, other than time deposits, in a savings account maintained with a specified bank, qualifying co-operative society or post office.

The maximum deduction is the lower of:

the total qualifying savings account interest included in gross total income; or
Rs. 10,000 for the relevant previous year.

Who can claim the deduction?

Taxpayer	Section 80TTA position
Individual not covered by Section 80TTB	Eligible, subject to the statutory conditions and tax regime rules.
Hindu undivided family (HUF)	Eligible, subject to the statutory conditions and tax regime rules.
Resident senior citizen eligible under Section 80TTB	Section 80TTA does not apply. Section 80TTB is the relevant provision.
Firm, company, AOP or BOI	Not eligible to claim Section 80TTA in its own right.

Which interest qualifies?

Qualifying interest must arise from a savings account with one of the institutions specified in Section 80TTA:

a banking company covered by the Banking Regulation Act, 1949, including the banking institutions referred to in Section 51 of that Act;
a co-operative society carrying on the business of banking, including a co-operative land mortgage bank or co-operative land development bank; or
a post office, as referred to in the statutory text of Section 80TTA.

What is not covered?

Section 80TTA expressly excludes interest on time deposits. For this section, a time deposit means a deposit repayable on expiry of a fixed period. Therefore, interest on a fixed deposit or similar fixed-period deposit is not deductible under Section 80TTA.

Important: Interest income is first included under the appropriate head of income. Section 80TTA then operates as a Chapter VI-A deduction, subject to eligibility and the applicable tax regime. It is not an exemption that removes the interest from gross income at the outset.

Maximum deduction under Section 80TTA

Total eligible savings interest	Deduction under Section 80TTA
Rs. 6,500	Rs. 6,500
Rs. 10,000	Rs. 10,000
Rs. 18,000	Rs. 10,000

Example: If an eligible taxpayer earns Rs. 7,000 savings interest from Bank A and Rs. 6,000 from Bank B, the aggregate qualifying interest is Rs. 13,000. The maximum deduction under Section 80TTA is Rs. 10,000. The balance Rs. 3,000 remains part of taxable income, subject to the other provisions of the Act.

Section 80TTA and the new tax regime under Section 115BAC

Section 115BAC is the default tax regime for eligible taxpayers from Assessment Year 2024-25 onward. The default regime permits only specified deductions and exemptions. Section 80TTA is not one of the Chapter VI-A deductions generally available under that regime. Accordingly, a taxpayer seeking to claim Section 80TTA must also satisfy the rules for validly choosing the old tax regime for the relevant assessment year.

For non-business cases, the option to move out of the default regime may generally be exercised in the income-tax return, subject to the applicable filing requirements. Taxpayers with business or professional income should check the separate option and Form 10-IEA requirements under Section 115BAC.

Difference between Section 80TTA and Section 80TTB

Point	Section 80TTA	Section 80TTB
Main eligible taxpayer	Individual not covered by Section 80TTB and HUF	Resident senior citizen
Maximum deduction	Rs. 10,000	Rs. 50,000
Nature of qualifying interest	Eligible savings account interest	Eligible interest on deposits covered by Section 80TTB, including savings and fixed deposits

Special rule for accounts held by firms, AOPs or BOIs

Section 80TTA(2) prevents a pass-through claim where savings account interest is derived from an account held by or on behalf of a firm, association of persons or body of individuals. Such interest cannot be used by a partner, member or individual of that body to claim a Section 80TTA deduction in computing that person's total income.

How to claim Section 80TTA

Add the eligible savings account interest from all qualifying accounts.
Report the interest under the appropriate income schedule in the income-tax return.
Confirm that Section 80TTB does not apply to you.
Confirm that your chosen tax regime permits the deduction.
Claim the eligible amount under Section 80TTA, restricted to a maximum of Rs. 10,000.
Keep bank or post office interest statements and other supporting records for verification if required.

Statutory meaning of time deposits

The Explanation to Section 80TTA defines "time deposits" as deposits repayable on expiry of fixed periods. This definition is important because the deduction is directed at savings account interest and not interest from fixed-period deposits.

Official references

For the current statutory text and return guidance, refer to the official Income Tax Department resources:

This article is a general explanation of the statutory provision. Tax treatment can depend on the assessment year, taxpayer status, nature of the deposit and tax regime selected.