Section 80TTA Deduction for AY 2026-27: How to Claim Savings Account Interest in Your ITR

What is the Section 80TTA deduction?

Section 80TTA of the Income-tax Act, 1961 allows an eligible individual or Hindu Undivided Family (HUF) to claim a deduction for interest on certain savings accounts. The maximum deduction is ₹10,000 in total, across all eligible accounts.

The deduction is the lower of:

• Eligible savings account interest included in your gross total income; or
• ₹10,000.

The limit applies to the combined interest from all your eligible accounts. It is not ₹10,000 for each account or bank.

AY 2026-27 covers income earned from 1 April 2025 to 31 March 2026, which is FY 2025-26. Returns for this period are governed by the Income-tax Act, 1961. Tax Year 2026-27 refers to income earned from 1 April 2026 onwards under the Income-tax Act, 2025.

Who can claim Section 80TTA?

Section 80TTA is available to an individual or HUF whose gross total income includes qualifying savings account interest, except an individual who is eligible to claim under Section 80TTB.

The account must be with one of these institutions:

• A bank;
• A co-operative society carrying on the business of banking; or
• A Post Office.

The interest must relate to an eligible savings account held by or for the person claiming the deduction. A partner cannot claim Section 80TTA for interest earned on a savings account held by a partnership firm. The same rule applies to accounts held by or for an association of persons or body of individuals.

Section 80TTA does not itself limit the claimant to residents. If you are an NRI, check whether the account and interest qualify, and whether the interest is taxable in India. Interest that is exempt from tax is not claimed as a deduction.

Resident senior citizens: check Section 80TTB

A resident individual who is 60 or older at any time during the relevant financial year may qualify for Section 80TTB instead of Section 80TTA. Section 80TTB allows a deduction of up to ₹50,000 for eligible interest on savings and other deposits with banks, co-operative banks and post offices.

An individual eligible for Section 80TTB cannot claim Section 80TTA as well. The deductions cannot be combined for the same interest. TaxClear’s Section 80TTB guide for AY 2026-27 explains the senior citizen deduction.

Which interest qualifies?

Section 80TTA covers interest on savings accounts, not interest on time deposits. A time deposit is repayable after a fixed period.

If a bank certificate shows both savings and fixed deposit interest, separate the amounts before calculating the deduction. Only qualifying savings account interest can be considered under Section 80TTA.

How much can you claim?

Add the eligible interest from all your savings accounts for FY 2025-26. Then compare the total with the ₹10,000 limit.

For example, suppose you earned ₹6,200 in savings interest at one bank and ₹4,800 at another. Your total is ₹11,000. If you meet the other conditions and use the old tax regime, your deduction is limited to ₹10,000. The remaining ₹1,000 does not qualify under Section 80TTA.

This is a deduction from gross total income, not an exemption from reporting the interest. Report the full interest first, then claim the eligible deduction. Your total deductions also cannot exceed the limits that apply to your gross total income.

Section 80TTA and the new tax regime

The new tax regime is the default regime for AY 2026-27. Section 80TTA cannot be claimed if you calculate tax under the new regime.

An eligible taxpayer can claim Section 80TTA under the old regime, subject to the section’s conditions. For taxpayers without business or professional income, the choice to opt out of the new regime generally had to be made by the due date for filing the return under Section 139(1).

For most individuals and HUFs filing ITR-1 or ITR-2 for AY 2026-27, the due date was 31 August 2026. If you did not opt out by the applicable due date, filing a belated return does not let you newly choose the old regime for this year. Taxpayers with business or professional income have separate rules for opting out.

Before choosing a regime, compare your tax under both options. Also, the tax regime selected by your employer for TDS does not by itself determine the regime you choose in your return.

How to report savings interest in your ITR

Savings account interest is generally reported under Income from Other Sources. If eligible, claim Section 80TTA separately in the deductions or Chapter VI-A schedule.

Report the full interest even if:

• It is less than ₹10,000;
• The bank did not deduct tax at source (TDS);
• It does not appear in Form 16; or
• You plan to claim a Section 80TTA deduction.

Do not enter only the amount above ₹10,000. Report the full interest and claim the deduction separately, up to the lower of the eligible interest or ₹10,000.

ITR-1 may be available to an eligible individual with savings interest if all ITR-1 conditions are met. If you are not eligible for ITR-1, ITR-2 may apply where you have no business or professional income. Your other income and circumstances determine the correct form. See TaxClear’s online ITR filing guide for AY 2026-27 for a wider overview.

Steps to claim Section 80TTA online

The portal layout may change, but the filing steps are generally:

1. Collect the savings interest details from all banks, eligible co-operative banks and post offices for FY 2025-26.
2. Separate savings interest from fixed deposit, recurring deposit and other time deposit interest.
3. Compare the figures with your Annual Information Statement (AIS), Taxpayer Information Summary (TIS), Form 26AS, bank statements and interest certificates.
4. Log in to the Income Tax e-Filing portal and select AY 2026-27.
5. Choose the ITR form that fits your income and eligibility.
6. Report the full taxable savings interest under the appropriate “Income from Other Sources” schedule.
7. If you validly opted for the old tax regime by the applicable due date, enter the eligible amount under Section 80TTA in the deductions schedule. Claim the lower of the qualifying interest or ₹10,000.
8. Review the tax calculation and check that the deduction has not been claimed under Section 80TTB as well.
9. Submit the return and complete e-verification within the prescribed time.

For AY 2026-27, most individuals and HUFs who missed their applicable original return deadline may file a belated return by 31 December 2026, or before their assessment is completed, whichever is earlier. A late filing fee under Section 234F is generally ₹1,000 where total income does not exceed ₹5 lakh and ₹5,000 in other cases. A belated return does not allow a taxpayer to newly opt for the old regime after the applicable due date.

If the portal does not show a Section 80TTA field, check your tax regime and ITR eligibility. Do not enter the deduction under a different section just to make it appear in the tax calculation.

Records to keep

Bank statements and interest certificates are not normally attached to your ITR. Keep them with your tax records in case the department asks you to support your return.

Useful records include:

• Savings account statements or passbooks;
• Bank and Post Office interest certificates;
• AIS, TIS and Form 26AS;
• A calculation showing total eligible interest across accounts;
• Separate calculations for fixed deposit and recurring deposit interest; and
• Your return acknowledgement and tax regime selection.

If AIS and an interest certificate do not match, check whether they cover different periods, accounts or interest types. Use the correct taxable income figure in your return.

Common Section 80TTA mistakes

Avoid these errors when filing:

• Claiming ₹10,000 for each account instead of applying one combined limit;
• Including fixed deposit, recurring deposit or other time deposit interest;
• Reporting only interest above ₹10,000 instead of reporting the full amount;
• Claiming Section 80TTA under the new tax regime;
• Claiming Section 80TTA and Section 80TTB for the same interest;
• Claiming interest from a firm’s account as a personal deduction; or
• Treating the deduction as an exemption from reporting the interest.

Examples

Interest below the limit: Rohan earned ₹7,600 in eligible savings account interest. If he meets the conditions and uses the old tax regime, his Section 80TTA deduction may be ₹7,600.

Interest across multiple accounts: Meera earned ₹5,000 in one account and ₹8,000 in another. Her eligible interest is ₹13,000, but her deduction is capped at ₹10,000 in total.

Savings and fixed deposit interest: Arjun earned ₹6,000 in savings account interest and ₹18,000 in fixed deposit interest. The savings interest may qualify under Section 80TTA, subject to the other conditions. The fixed deposit interest does not qualify under this section, but must still be reported under the appropriate income head.

Resident senior citizen: A resident taxpayer aged 64 should check Section 80TTB for eligible savings and deposit interest. The same interest cannot also be claimed under Section 80TTA.

FAQs

Is savings account interest tax-free up to ₹10,000?

No. You still report the interest. An eligible taxpayer using the old tax regime may claim a deduction of up to ₹10,000 under Section 80TTA.

Can I claim Section 80TTA under the new tax regime?

No. Section 80TTA is not available under the new tax regime for AY 2026-27.

Is the ₹10,000 limit per bank?

No. Add eligible interest from all qualifying accounts. The total deduction is capped at ₹10,000.

Does Section 80TTA cover fixed deposit interest?

No. Fixed deposits, recurring deposits and other time deposits are not covered.

Do I need to submit bank statements with my ITR?

Usually, no. Keep statements and interest certificates with your records in case you need to support the figures in your return.