Claim audit · FY 2026-27

“Up to Rs 10,000 of savings account interest is tax-free for everyone, and senior citizens get Rs 50,000 free on all interest.”

Section 80TTA is narrow: a resident individual/HUF below 60 years can deduct up to Rs 10,000 of interest on amounts in a savings account with a bank, co-operative society or post office. It explicitly does not cover fixed-deposit, recurring-deposit or bond interest — that interest is fully taxable at slab rates. Section 80TTB is wider in scope but limited in person: a resident individual aged 60 or above can deduct up to Rs 50,000 of interest on 'deposits' — which includes savings accounts, FDs, RDs, co-operative bank deposits and post-office time deposits. Senior citizens do not get 80TTA; they get 80TTB. Both sections are Chapter VI-A deductions from gross total income and are available ONLY in the old tax regime; under the new regime under section 115BAC, Chapter VI-A deductions (except 80CCD(2) employer NPS) are not allowed, so 80TTA/80TTB vanish entirely. Worked example 1: a 35-year-old earns Rs 20,000 savings interest and Rs 60,000 FD interest. 80TTA covers only the savings interest, capping the deduction at Rs 10,000, so Rs 60,000 of FD interest plus Rs 10,000 of savings interest remain taxable. Worked example 2: a 68-year-old has Rs 70,000 savings interest and Rs 1.5 lakh FD interest. 80TTB caps the deduction at Rs 50,000, leaving Rs 1.7 lakh taxable; in the new regime the deduction is zero and the entire Rs 2.2 lakh is taxable. The 80TTB deduction applies before other Chapter VI-A deductions but cannot create or increase a loss; it simply reduces taxable income. The common confusion — treating 80TTA's Rs 10,000 as 'tax-free' and assuming FD interest is also safe — is wrong; the deduction reduces income, and any interest above the limit is charged at slab rates, with TDS at 10% (or 20% without PAN) on FDs above Rs 40,000 (Rs 50,000 for seniors).