Section 80TTB Deduction for Senior Citizens: Rs 50,000 Interest Relief
Section 80TTB of the Income-tax Act, 1961 allowed a resident senior citizen to deduct qualifying interest on deposits with banks, specified co-operative banking societies and post offices, subject to an aggregate limit of Rs. 50,000. For tax years beginning on or after 1 April 2026, the corresponding provision is section 153 of the Income-tax Act, 2025.
What is section 80TTB?
Section 80TTB was introduced by section 32 of the Finance Act, 2018, with effect from 1 April 2019 (assessment year 2019-20). It reduces taxable total income by eligible interest income up to Rs. 50,000 for a qualifying resident individual aged 60 or above. The limit applies to the combined interest from all eligible deposits, not separately to each account or institution.
Who is eligible?
For section 80TTB, a senior citizen means an individual resident in India who is 60 years of age or more at any time during the relevant previous year. An individual aged 80 or above also qualifies. Non-resident individuals, HUFs, firms and companies do not qualify under section 80TTB. Age and residential status should be determined for the relevant year.
Which interest income qualifies?
- Bank deposits: interest on savings accounts, fixed deposits, recurring deposits and other eligible deposits with banking companies covered by the Banking Regulation Act, 1949.
- Co-operative banks: interest on deposits with co-operative societies carrying on banking business, including the banking entities specified in the provision.
- Post office deposits: eligible interest on deposits with a post office.
Unlike section 80TTA, which was restricted to savings-account interest, section 80TTB includes eligible time-deposit interest, including fixed and recurring deposits. Interest on corporate bonds, debentures, ordinary company deposits and other investments outside the specified deposit institutions is not covered merely because it is described as interest.
Deduction limit and calculation
The deduction is the lower of eligible deposit interest included in gross total income and Rs. 50,000, subject to the other statutory conditions and the applicable tax regime. It cannot exceed the qualifying income or create a loss.
| Eligible interest during the year | Maximum deduction | Interest remaining before other adjustments |
|---|---|---|
| Rs. 18,000 | Rs. 18,000 | Nil |
| Rs. 50,000 | Rs. 50,000 | Nil |
| Rs. 82,000 | Rs. 50,000 | Rs. 32,000 |
Example: A resident senior citizen earns Rs. 12,000 savings interest, Rs. 34,000 fixed-deposit interest and Rs. 15,000 eligible post-office deposit interest. The combined eligible interest is Rs. 61,000; the deduction is limited to Rs. 50,000 under the old regime.
Restrictions under subsection (2)
Where the relevant deposit is held by, or on behalf of, a firm, association of persons (AOP) or body of individuals (BOI), a partner or member cannot separately claim section 80TTB relief on that entity's deposit interest. The taxpayer must report interest income correctly and claim only eligible amounts.
Old versus new income-tax regime
For assessment year 2026-27 under the Income-tax Act, 1961, the section 80TTB deduction is available to eligible taxpayers opting for the old tax regime. Under the default new regime under section 115BAC, section 80TTB is generally not permitted. The choice of regime must follow the rules applicable to the taxpayer, including any business-income election requirements. See the Income Tax Department's old-versus-new-regime FAQs.
Income-tax Act, 2025: section 153
With effect from 1 April 2026, section 153, "Deduction for interest on deposits", combines the substance of former sections 80TTA and 80TTB. Section 153(1)(b) read with section 153(2)(b) provides eligible senior citizens a deduction of interest up to Rs. 50,000 on deposits in any account, including time deposits, with specified banks, co-operative banking societies and post offices. Section 153 also separately addresses non-senior individuals and HUFs, with a Rs. 10,000 savings-interest limit. Section 153(4) preserves the restriction relating to firm, AOP and BOI deposits.
The section 153 deduction is subject to the provisions governing the taxpayer's chosen tax regime. It should not be assumed to be available under the default new regime merely because it appears in the 2025 Act. Read the official Income-tax Act, 2025 (PDF) for the operative text.
Section 80TTA compared with section 80TTB
| Feature | Section 80TTA (1961 Act) | Section 80TTB (1961 Act) |
|---|---|---|
| Eligible claimant | Individual or HUF other than a person covered by 80TTB | Resident individual aged 60 or above |
| Maximum deduction | Rs. 10,000 | Rs. 50,000 |
| Covered interest | Eligible savings-account interest only | Eligible savings and time-deposit interest |
| 2025 Act provision | Section 153, with separate claimant categories and limits | |
How to claim the deduction
- Confirm residential status, age and eligibility for the old tax regime.
- Collect annual interest certificates, account statements and Form 26AS/AIS details, as relevant.
- Aggregate qualifying interest across all eligible institutions, including accrued interest where taxable.
- Disclose the taxable interest under the appropriate income head and claim the deduction in the relevant deduction schedule of the income-tax return.
- Retain supporting documents in case of verification; a deduction does not by itself eliminate applicable TDS or return-filing obligations.
Frequently asked questions
Can senior citizens deduct fixed-deposit interest?
Yes. Interest from eligible fixed deposits and recurring deposits is within the scope of section 80TTB, subject to the Rs. 50,000 aggregate cap and other conditions.
Is Rs. 50,000 available separately for each bank?
No. The ceiling is one aggregate deduction for the eligible interest income of the taxpayer for the relevant year.
Can a non-resident senior citizen claim section 80TTB?
No. The statutory definition requires the individual to be resident in India for the relevant previous year.
Can a taxpayer claim both sections 80TTA and 80TTB?
No. Section 80TTA expressly excludes an assessee covered by section 80TTB.
Is the deduction automatic in the new tax regime?
No. The deduction is generally unavailable in the default new tax regime; compare regimes before filing.
Official legal references
- Income Tax Department - Section 80TTB, Income-tax Act, 1961
- Finance Act, 2018 - Section 32 inserting section 80TTB
- Income-tax Act, 2025 - Section 153 (official PDF)
- Income Tax Department - FAQs explaining consolidation of 80TTA and 80TTB
- Income Tax Department - Tax regime FAQs
Legal information updated 25 October 2026. Application depends on the relevant tax year, residency, tax regime and current statutory rules.