In this guide
What is Section 80TTB?
Under Section 80TTB of the Income-tax Act, 1961, an eligible resident senior citizen can claim a deduction on interest income from specified deposits. The deduction is the lower of:
- Eligible interest income for the year; or
- ₹50,000.
It is a deduction from gross total income when calculating taxable total income. It is not a tax-free interest payment, tax refund or rebate.
AY 2026-27 covers income earned from 1 April 2025 to 31 March 2026. The Income-tax Act, 1961 applies to this assessment year because the income was earned before 1 April 2026. The Income-tax Act, 2025 applies to tax years beginning on or after that date.
Who can claim the deduction?
Section 80TTB is available to an individual who is both:
- A resident of India for the relevant previous year; and
- At least 60 years old at any time during that year.
For AY 2026-27, the relevant previous year is FY 2025-26. A person who turned 60 at any time between 1 April 2025 and 31 March 2026 can meet the age condition. The age test is not based on when the deposit was opened or interest was paid.
The deduction is not available under Section 80TTB to:
- A non-resident, even if they are 60 or older;
- An HUF;
- Someone under 60; or
- A partner or member claiming interest from a deposit held by or on behalf of a firm, association of persons or body of individuals.
Other tax rules may apply to a non-resident senior citizen, but they cannot claim this resident-only deduction.
Which interest qualifies?
The interest must be earned on deposits with one or more of the institutions specified in Section 80TTB:
- A bank covered by the Banking Regulation Act, 1949;
- A co-operative society engaged in banking, including a co-operative land mortgage or land development bank; or
- A Post Office.
Interest on savings accounts and fixed or recurring deposits with these institutions may qualify. Add eligible interest from all qualifying accounts and institutions before applying the ₹50,000 cap.
| Interest source | Generally eligible under Section 80TTB? |
|---|---|
| Savings account with a qualifying bank | Yes |
| Fixed or recurring deposit with a qualifying bank | Yes |
| Deposit with a qualifying co-operative bank | Yes |
| Deposit with the Post Office | Yes |
| Corporate fixed deposit | No |
| Interest on bonds or debentures | No |
| Interest on an NBFC deposit | Not covered by Section 80TTB |
Interest that does not meet Section 80TTB’s source conditions may still be taxable under the relevant provisions. An investment does not qualify just because it is called a “deposit.” Check the institution and product before claiming the deduction.
How the ₹50,000 limit works
The deduction is limited to ₹50,000 for the entire year across all eligible deposits. It is not ₹50,000 per bank, account, deposit or family member.
Example 1: A resident senior citizen earns ₹32,000 in savings-account interest and ₹27,000 in fixed-deposit interest from qualifying banks. The eligible interest totals ₹59,000, so the deduction is capped at ₹50,000.
Example 2: A resident senior citizen earns ₹38,000 in eligible bank interest and ₹25,000 in interest on a corporate fixed deposit. The Section 80TTB deduction is generally limited to ₹38,000. The corporate-deposit interest does not qualify, even if the total interest is below ₹50,000.
Example 3: If eligible interest from qualifying deposits is ₹18,000, the deduction is ₹18,000, not ₹50,000. The unused portion of the cap cannot be deducted from pension, rent, salary or other income.
The deduction is limited to eligible interest included in the taxpayer’s gross total income. It cannot create a loss or exceed the qualifying interest.
Section 80TTB and the old or new tax regime
The new tax regime is the default regime for AY 2026-27, but eligible taxpayers may be able to opt for the old regime, subject to the rules that apply to their circumstances.
Section 80TTB is not allowed if the taxpayer opts for the new tax regime under Section 115BAC. The deduction may be claimed only by a taxpayer eligible for and opting for the old regime.
A senior citizen should compare the tax payable under both regimes. The ₹50,000 deduction alone does not determine which regime is better. The comparison should include total income, other deductions and exemptions, eligible rebates and the final tax payable under each regime.
| Tax regime for AY 2026-27 | Section 80TTB deduction |
|---|---|
| Old tax regime | May be claimed if eligibility and other conditions are met |
| New tax regime under Section 115BAC | Not allowed |
Do not choose the old regime only because Section 80TTB is available. Calculate the final tax liability under both regimes using the taxpayer’s total income and deductions.
How to claim Section 80TTB in the ITR
Report the interest income and the deduction separately. Claiming the deduction does not replace the requirement to disclose taxable interest.
A practical filing order is:
- Collect interest records. Get annual interest certificates or statements from banks, co-operative banks and the Post Office.
- Separate eligible and ineligible interest. Check which institutions and deposits qualify under Section 80TTB.
- Reconcile tax information. Match the records with AIS, TIS and Form 26AS, where applicable. Resolve differences with the institution if needed.
- Report the interest. Enter the taxable interest in the appropriate income schedule, usually under “Income from Other Sources,” following the selected ITR form and its instructions.
- Check the tax regime. Claim Section 80TTB only if opting for the old regime.
- Enter the deduction. Report the eligible amount in the deductions schedule under Section 80TTB, subject to the ₹50,000 cap.
- Review the return. Confirm that the deduction does not exceed eligible interest and that interest is not reported only as a net amount after TDS.
- Verify the ITR. E-verify the return or submit the ITR-V within 30 days of filing.
The appropriate ITR form depends on the taxpayer’s income and eligibility, not just age. Some resident senior citizens with straightforward income may qualify for ITR-1. Others may need ITR-2 or ITR-3, for example because of capital gains, business or professional income, or other form restrictions. Check the notified AY 2026-27 form and instructions. TaxClear’s online ITR filing guide for AY 2026-27 explains the general filing process.
Return forms and schedules can change from year to year. Use the AY 2026-27 utility rather than copying a deduction field or schedule from an earlier return.
TDS on interest is separate from the deduction
A bank may deduct tax at source on interest under Section 194A when the applicable conditions and thresholds are met. TDS is an advance tax credit. It does not determine whether the interest qualifies for Section 80TTB, and it does not remove the need to report the interest in the return.
Even if interest is below ₹50,000, consider the taxpayer’s overall tax position and return-filing requirements. Conversely, TDS may have been deducted and the taxpayer may still owe tax after the return is calculated.
Check interest certificates, Form 16A if issued, AIS and Form 26AS. If TDS is missing or reported incorrectly, contact the bank or payer to correct its reporting and check the tax records again before filing.
Records to keep
Keep records to support the interest income and deduction, including:
- Bank and Post Office annual interest certificates;
- Bank statements;
- Fixed-deposit and recurring-deposit advice;
- Proof of age, if required;
- Evidence of residential status, if relevant;
- AIS, TIS, Form 26AS and TDS certificates;
- A calculation of eligible interest and the ₹50,000 limit; and
- The filed ITR and acknowledgement.
Supporting records may help explain differences between reported interest, TDS information and the deduction claimed, even if they are not uploaded with the return.
Common errors to avoid
- Claiming Section 80TTB under the new tax regime;
- Claiming it as a non-resident or on behalf of an HUF;
- Applying the ₹50,000 limit separately to each account or bank;
- Including interest from corporate deposits, bonds or other ineligible sources;
- Claiming ₹50,000 when eligible interest is lower;
- Reporting only interest after TDS instead of the required income amount;
- Assuming no further tax is due because TDS was deducted; and
- Choosing an ITR form based only on age.
Pension, salary, rent, dividends and capital gains received in addition to deposit interest must also be reported in the appropriate schedules. Section 80TTB does not exempt or override the rules for those income sources.
Frequently asked questions
Can I claim Section 80TTB if I turned 60 in FY 2025-26?
Yes, if you were a resident individual and turned 60 at any time in FY 2025-26, subject to the other conditions.
Is Section 80TTB available under the new tax regime?
No. For AY 2026-27, it may be claimed only under the old tax regime, provided the taxpayer is eligible and opts for it.
Can I claim ₹50,000 for each bank?
No. ₹50,000 is the maximum total deduction for the year across all qualifying deposits.
Does Section 80TTB make bank interest tax-free?
Not automatically. Report the interest as required, then claim the eligible deduction when calculating total income under the old tax regime.
Can I claim it on interest from a company fixed deposit?
Generally, no. Section 80TTB covers deposits with specified banks, qualifying co-operative banking societies and the Post Office, not corporate deposits.
