80TTA Deduction Guide: Savings Account Interest – A Tax-Saving Move for FY 2024-25

Gaurav Rodiyal
May 12
3 min read

When it comes to tax planning, even small savings can translate into significant benefits. One such provision is Section 80TTA of the Income Tax Act, 1961, which allows individuals and Hindu Undivided Families (HUFs) to claim a deduction on interest income from savings accounts. For the financial year 2024–25, this deduction continues to offer a straightforward and effective way to reduce taxable income — provided you meet the eligibility criteria.

Understanding Section 80TTA

Section 80TTA provides a deduction of up to ₹10,000 per year on interest earned from savings accounts held with:

Banks (covered under the Banking Regulation Act, 1949),
Co-operative banks, including co-operative land mortgage or development banks, and
Post Offices (as defined under the Indian Post Office Act, 1898).

It is important to note that this deduction is not available on interest from time deposits such as fixed deposits (FDs) or recurring deposits (RDs).

Who Can Claim This Deduction?

Eligible: Individual taxpayers and HUFs (below the age of 60)
Not Eligible: Senior citizens (60 years and above)

Senior citizens are covered under Section 80TTB, which offers a higher deduction of up to ₹50,000 on interest from all types of deposits (including savings, FDs, and RDs). Section 80TTA and Section 80TTB cannot be claimed together.

Eligible vs. Ineligible Interest Income

Qualifying Sources for 80TTA:

Savings accounts in scheduled banks
Co-operative societies operating as banks
Post office savings accounts

Non-qualifying Sources:

Interest from fixed deposits (FDs)
Recurring deposits (RDs)
Corporate bonds, debentures, or debt instruments
Interest from provident fund schemes (EPF, PPF)
Private lending or business loan interest

Deduction Limits for FY 2024–25

Up to ₹10,000 of interest from all eligible savings accounts can be deducted.
If your total interest income is less than ₹10,000, the full amount is deductible.
If it exceeds ₹10,000, only ₹10,000 is deductible; the rest is taxable.

Example: If your interest income is ₹8,000 → you can deduct the entire ₹8,000. If it's ₹15,000 → only ₹10,000 is deductible; ₹5,000 is taxable.

How to Claim the Deduction

While filing your Income Tax Return (ITR):

Report the total interest earned under the head "Income from Other Sources."
In the deductions section, claim the amount under Section 80TTA, limited to ₹10,000.

There is no requirement to submit proof like investment declarations; however, it’s advisable to retain:

Bank statements/passbook entries
Interest certificates (if available)

These documents can serve as supporting evidence in case of a future tax assessment.

Key Considerations

Applicable Only Under the Old Tax Regime: Section 80TTA benefits are not available under the new tax regime, which is the default regime from FY 2023–24 onward. Under the new regime, a smaller exemption of ₹3,500 per bank (under Section 10(15)(i)) may still apply.
For NRIs:
- NRE accounts: Interest is fully tax-exempt in India, and no deduction under 80TTA is required.
- NRO accounts: Interest is taxable and eligible for deduction under Section 80TTA, up to ₹10,000.

Frequently Asked Questions

Can senior citizens claim both 80TTA and 80TTB?

No. Senior citizens (60+) must claim benefits under Section 80TTB only. Section 80TTA is strictly for individuals and HUFs below 60 years.

Is documentary proof required for claiming 80TTA?

No. However, maintain bank statements or interest certificates as part of your tax records.

How to fill out 80TTA details in the ITR?

Include your interest income under "Income from Other Sources" and enter the deduction claimed under the "Schedule VI-A" section of your ITR form.

Final Thoughts from Infosential LLP

While the ₹10,000 cap may seem modest, leveraging Section 80TTA effectively can contribute to optimizing your annual tax outgo. At Infosential LLP, we advise our clients to carefully track their savings interest and ensure correct reporting to avoid notices or discrepancies during assessment. For senior citizens, exploring Section 80TTB is equally important, given its broader scope.