Updated on 19 Nov 2025
When it comes to saving tax, the Income Tax Act offers several provisions for deductions. One such option is Section 80TTA, which allows individuals to claim a reduction on the interest earned from savings accounts. This section provides relief to taxpayers, especially salaried individuals and small savers, by reducing their taxable income.
Understanding section 80TTA of the Income Tax Act
Section 80TTA was introduced to encourage savings in banks and post offices. It allows individuals and Hindu Undivided Families (HUFs) to claim a deduction on the interest income earned from savings accounts. However, it is important to note that this section does not apply to fixed deposits, recurring deposits or time deposits.
Eligibility for claiming 80TTA deduction
Not every taxpayer can avail of this deduction. The eligibility includes:
- Resident individuals who are below 60 years of age
- Hindu Undivided Families (HUFs)
- The savings account should be held with a bank, cooperative bank or post office.
Maximum deduction allowed under section 80TTA
The maximum deduction that can be claimed under this section is ₹10,000 in a financial year. If your total savings account interest is less than ₹10,000, the actual amount will be deductible. If it exceeds ₹10,000, only ₹10,000 will be allowed as a deduction.
Difference between 80TTA and 80TTB
Sections 80TTA and 80TTB deal with deductions on interest income, but the eligibility differs.
80TTA is available for resident individuals below 60 years and HUFs, with a deduction limit of ₹10,000. 80TTB is applicable for resident senior citizens (60 years and above), with a higher deduction limit of ₹50,000.
How to claim 80TTA deduction in the income tax return?
To claim this deduction, you need to disclose your total savings account interest under ‘Income from Other Sources’. After calculating the total interest, you can claim a deduction of up to ₹10,000 under Section 80TTA while filing your Income Tax Return (ITR).
Example of 80TTA deduction calculation
Suppose your savings account interest for the year is ₹7,500. You can claim a deduction of the full amount under Section 80TTA. If the interest earned is ₹14,000, you can only claim ₹10,000 as a deduction, and the remaining ₹4,000 will be taxable.
Benefits of 80TTA deduction for taxpayers
This section helps reduce your taxable income and, therefore, your tax liability. It especially benefits individuals who maintain multiple savings accounts.
Conclusion
Section 80TTA provides relief to taxpayers by allowing deductions on interest earned from savings accounts, subject to a maximum limit. While it may appear small, it can reduce your taxable income and help you save on taxes.
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FAQ
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Can I claim both 80TTA and 80TTB in the same year?
No, you can claim either 80TTA or 80TTB, depending on your eligibility.
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Do I need to submit bank certificates to claim a deduction under 80TTA?
You need to report the total savings account interest in your Income Tax Return. Supporting documents may be required in case of verification by the tax department.
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