Applicable to: Individuals & HUFs (Non-Senior Citizens)
This section provides tax relief on interest income from savings accounts, reducing taxable income for small depositors.
Key Features (AY 2025-26)
1. Eligible Income
✅ Interest from:
- Savings accounts (banks/post offices)
- Cooperative society savings accounts
❌ Excludes:
- Fixed deposit (FD) interest
- Recurring deposit (RD) interest
- Senior citizen savings (covered under 80TTB)
2. Deduction Limit
| PARAMETER | LIMIT |
| Maximum Deduction | ₹10,000/year |
| Per Account/Bank | Consolidated limit |
| Income Type | Interest (Form 16A/26AS) |
3. Claim Process
- No separate formneeded
- Report in ITR-1/2/4under “Deductions”
- Bank TDS:No TDS if interest ≤ ₹10,000 (else claim refund)
Illustrative Example
Case: Earns ₹15,000 savings interest across 3 banks
- Taxable Before 80TTA:₹15,000
- Deduction Claimed:₹10,000
- Taxable After 80TTA:₹5,000
- Tax Saved (@30%):₹3,000
Comparison with Similar Sections
| SECTION | APPLICABILITY | BENEFIT |
| 80TTA | Savings Interest (Non-Seniors) | ₹10,000 |
| 80TTB | Deposit Interest (Seniors) | ₹50,000 |
| 194A | FD Interest TDS | 10% TDS if > ₹40,000 |
Pro Tips
- Spread Savingsacross family members to maximize household deductions
- Opt for Monthly Payoutsto stay under ₹10,000/year per account
- Link PAN to Accountsto avoid 20% TDS for non-PAN accounts
FAQs
Q: Can I claim both 80TTA and 80TTB?
A: No, seniors (60+) must use only 80TTB.
Q: Is Post Office Savings Account eligible?
A: Yes, all savings accounts qualify.
Q: What if my bank deducted TDS on ₹8,000 interest?
A: Claim refund while filing ITR (TDS shouldn’t apply below ₹10k).
Conclusion
Section 80TTA benefits small savers with up to ₹10k tax-free interest. To optimize:
- Monitor cumulative interestacross all accounts
- Prefer savings accountsover FDs for liquidity + tax benefit
- Verify Form 26ASfor accurate interest reporting
