Section 80TTA vs 80TTB – Key Differences, Benefits & How to Claim

Section 80TTA and 80TTB form part of Chapter VI-A of the Income Tax Act, 1961. They provide deductions on interest from bank and post office accounts. Deductions under both of the aforesaid sections are available only under the old regime. While deduction is provided on similar income, the maximum limit and persons eligible differ for both the sections.

Latest Update on Section 80TTA and 80TTB Deduction

Budget 2025 has relaxed the TDS threshold limits for interest income. However, it is to be noted that this is an amendment under section 194A, altering TDS threshold limits, not the deduction ceiling limit under section 80TTA and 80TTB. The maximum deduction limit under the aforesaid sections remain unchanged (Rs 10,000 u/s 80TTA and Rs 50,000 u/s 80TTB).

What is Section 80TTA ?

Section 80TTA provides deduction on interest on savings account operated in banks, co-operative banks, and post offices. A maximum deduction of Rs 10,000 is available under this section. However, this deduction is available only under the old regime.

What is Section 80TTB?

Section 80TTB provides deduction against interest income earned from deposit account and savings account. All the accounts that are classified as ‘Time Deposit’ as per RBI guidelines are eligible for deduction under this section. Therefore even recurring deposits are eligible for deduction u/s 80TTB. The maximum ceiling limit is fixed at Rs 50,000 and it is available only under the old regime.However, this deduction is available for senior citizens only. 

Key Differences Between Section 80TTA and Section 80TTB

The following table shows the key differences between sections 80TTA and 80TTB of the Income Tax Act.

Example Scenarios for 80TTA and 80TTB

Mr A , a 59 year old salaried employee, has a savings account. On July 2025, he deposited surplus funds of Rs 2.5 lakhs in an FD account for a term of 5 years. For the financial year 2025-26, he has earned interest income of Rs 7,000 from his savings account and Rs. 20,000 during the year. Let us now discuss the tax implications of section 80C, 80TTA, and 80TTB.

1. Firstly, he can claim a deduction of Rs 1.5 lakhs under section 80C since it is a tax saver deposit.
2. For FY 2025-26, he can claim deduction of savings bank interest of Rs 7,000 only under section 80TTA. He cannot claim interest deduction against FD interest of Rs 20,000 under section 80TTB as he is not yet a senior citizen for FY 2025-26.
3. However, for the next financial year FY 2026-27, he can claim deduction on both deposit interest and savings bank interest under section 80TTB, as he becomes a senior citizen on the next year.

80TTA and 80TTB in the New Tax Regime

Under section 115BAC, interest deduction under section 80TTA and 80TTB is not available under the new tax regime. Therefore, alternative tax saving strategies are recommended for this kind of income earners under the new regime. 

How to Claim Section 80TTA and 80TTB Deduction - Documents Required 

• In most cases the Annual Information System (AIS) captures the interest income details, including both savings and deposit account interest. However, it is always recommended to match the interest income with the bank statements or interest certificate provided by the banks for accurate return filing. 
• You can enter the deduction particulars under Schedule VI-A of ITR.
• Please note that this deduction is not auto claimed, you have to manually enter the deduction particulars in order to claim the deduction.

Conclusion

It is to be noted that interest on all the deposits that are categorised as ‘Time Deposits’ by RBI are eligible for deduction under section 80TTB. That way, even recurring deposit interest is eligible for deduction under section 80TTB. However, since both these interest deductions are available only under the old regime, taxpayers should make conscious choice of regime well in the beginning of the financial year and plan their ta saving strategies accordingly.