Two deductions, two kinds of interest
All interest you earn is taxable at your slab rate. The old regime gives back a slice of it through two deductions (sections 80TTA and 80TTB of the old Act, renumbered in the Income-tax Act 2025 with the same limits):
| 80TTA | 80TTB | |
|---|---|---|
| Who | Individuals and HUFs, not resident seniors | Resident individuals aged 60 or more |
| Which interest | Savings accounts only | Savings accounts, fixed and recurring deposits |
| Where | Banks, co-operative banks, post office | Banks, co-operative banks, post office |
| Limit | ₹10,000 | ₹50,000 |
| Regime | Old only | Old only |
The difference that matters is the second row. Most people below 60 earn the bulk of their interest from FDs, and 80TTA does nothing for that.
Worked case 1: a 45-year-old
Interest this year: ₹14,000 on savings accounts and ₹40,000 on FDs, ₹54,000 in total. Slab rate 20%.
- Deduction under 80TTA: the lower of savings interest and ₹10,000 = ₹10,000. The FD interest gets nothing.
- Taxable interest: ₹44,000.
- Tax saved by the deduction: 10,000 × 20% × 1.04 = ₹2,080.
At the 30% slab the same deduction saves ₹3,120. At 5%, ₹520.
Worked case 2: a 66-year-old
Interest this year: ₹8,000 on savings and ₹1,20,000 on FDs and a recurring deposit, ₹1,28,000 in total. Slab rate 20%.
- Deduction under 80TTB: the lower of total deposit interest and ₹50,000 = ₹50,000.
- Taxable interest: ₹78,000.
- Tax saved: 50,000 × 20% × 1.04 = ₹10,400.
80TTB is five times as large and covers the interest that seniors actually live on, which is why it matters more in retirement planning.
What does not count
- Interest from debt funds, bonds, corporate deposits or NBFC FDs. These are not bank, co-operative bank or post office deposits.
- Senior Citizens' Savings Scheme interest is post office deposit interest and is generally counted under 80TTB. Check the scheme's statement for the exact figure.
- Interest on tax-free bonds or PPF is already exempt and is not part of this.
Is the old regime worth keeping for this?
Rarely on its own. The new regime has no 80TTA or 80TTB, but up to ₹12 lakh of slab income attracts no tax there because of the section 87A rebate. For a retiree whose only income is ₹6–8 lakh of interest and pension, the new regime already makes the tax zero, so the ₹50,000 deduction adds nothing. It helps when the old regime wins anyway because of other deductions. The old vs new regime comparison shows where that line falls.
A separate question is TDS: a bank deducts tax on FD interest above a threshold whatever deduction you plan to claim. How to stop that is in TDS on FD interest.
Reading this
- Interest figures are invented. Tax saved is the deduction times the slab rate plus 4% cess; surcharge is ignored.
- A senior is someone aged 60 or more at any time in the financial year.
- This explains the deductions. It does not advise which regime to file under.
Frequently asked questions
What is the difference between 80TTA and 80TTB?
80TTA allows individuals below 60 a deduction of up to ₹10,000 on interest from savings accounts only. 80TTB allows resident senior citizens up to ₹50,000 on interest from savings accounts, fixed deposits and recurring deposits with banks, co-operative banks and the post office.
Can I claim 80TTA or 80TTB in the new tax regime?
No. Both are old-regime deductions. In the new regime interest is taxed in full at your slab rate, though the section 87A rebate can still bring total tax to zero for lower incomes.
Can a senior citizen claim both 80TTA and 80TTB?
No. A resident senior claims 80TTB, which already includes savings interest; 80TTA is not available to them.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
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