Section 80TTB: Senior Citizens Save Tax on FD and Bank Interest

If you are a resident senior citizen in India, Section 80TTB of the Income-tax Act, 1961 lets you cut up to ₹50,000 a year off the interest you earn from your fixed deposits, savings accounts and recurring deposits before tax is calculated. That is a real saving for retirees who live on deposit interest, but it comes with one catch that trips up many people: it only works under the old tax regime.

Quick answer: A resident senior citizen (age 60 or above any time in the year) can deduct up to ₹50,000 of interest income from deposits with banks, co-operative banks and the post office under Section 80TTB. It is a Chapter VI-A deduction, so it is available only if you choose the old tax regime. Non-resident senior citizens cannot claim it.

What Section 80TTB is

Section 80TTB is a deduction that the Finance Act, 2018 added to the Income-tax Act, 1961, effective from Assessment Year 2019-20 (Financial Year 2018-19). It gives a resident individual who is a senior citizen a deduction of up to ₹50,000 against interest earned on deposits. The deduction is the actual interest income or ₹50,000, whichever is lower.

Who can claim it

  • Age: You must be 60 years or older at any time during the financial year.
  • Residency: You must be a resident of India for the year. Non-resident Indians (NRIs) cannot claim Section 80TTB.
  • Status: It is for individuals only, not for firms, associations of persons or bodies of individuals.

What interest is covered

Section 80TTB covers interest on deposits held with:

  • Banks (including private and public sector banks)
  • Co-operative societies engaged in banking, including co-operative banks
  • The post office

The deduction applies to interest from savings deposits, fixed deposits and recurring deposits at these institutions. So unlike the older Section 80TTA (which only covers savings account interest), 80TTB covers term and recurring deposits too.

What is generally not covered is interest from sources that are not deposits with these institutions, such as interest on company or corporate bonds and non-convertible debentures (NCDs). For post office small-savings schemes, the safe reading is that interest on a genuine post office deposit is covered, but the deduction is capped at ₹50,000 across all your eligible interest combined, so plan accordingly and confirm scheme-specific treatment with your tax adviser.

80TTB vs 80TTA: you pick one, not both

Section 80TTA gives all individuals and Hindu Undivided Families a deduction of up to ₹10,000, but only on savings account interest. Section 80TTB gives senior citizens a larger ₹50,000 deduction on a wider set of deposits.

A senior citizen who is eligible for 80TTB cannot also claim 80TTA. You choose one section. For almost every senior citizen, 80TTB is the better deal because the cap is five times higher and it covers fixed and recurring deposits, not just savings interest.

Old regime only: the catch

Section 80TTB is a Chapter VI-A deduction. Under the new tax regime (the default regime under Section 115BAC), most Chapter VI-A deductions, including 80TTB, are not allowed. The official Income Tax Department portal lists 80TTB only under the old regime deductions.

So before you count on the ₹50,000 saving, work out your tax both ways. If the old regime with 80TTB and your other deductions leaves you paying less, opt for the old regime when you file. If you stay in the new regime, you forfeit this deduction.

80TTB at a glance

Feature Detail
Deduction cap ₹50,000 per year
Who Resident senior citizen, age 60+
Deposits covered Savings, fixed and recurring at banks, co-operative banks, post office
Tax regime Old regime only
Effective from AY 2019-20

① Earn deposit interest → ② Confirm you are a resident senior citizen → ③ Choose the old regime → ④ Claim up to ₹50,000 under 80TTB → ⑤ Pay tax only on interest above the cap

TDS, Form 15H and the ₹1,00,000 threshold

Two different limits often get confused, so keep them apart:

  • 80TTB deduction cap: ₹50,000. This is what you subtract from your income when computing tax. This figure has not changed.
  • Section 194A TDS threshold for senior citizens: From 1 April 2025, banks, co-operative banks and post offices deduct TDS on interest only when the interest paid to a senior citizen crosses ₹1,00,000 in a year (raised from the earlier ₹50,000 by the Finance Act, 2025). Below that, no TDS is deducted.

Even above the threshold, a senior citizen whose total tax for the year will be nil can file Form 15H with the bank or post office to stop TDS from being deducted in the first place. This avoids having to claim a refund later. Remember that the 80TTB deduction reduces your taxable interest, which often brings a retiree below the taxable limit and makes Form 15H valid.

Real-life example

Mohan Lal, age 67, of Lucknow, lives on interest from his retirement savings. In a year he earns ₹38,000 from a bank fixed deposit, ₹9,000 from a post office recurring deposit and ₹6,000 from his savings account, a total of ₹53,000.

Under Section 80TTB he claims a deduction of ₹50,000 (the cap). Only ₹3,000 of his interest is added to his taxable income. Because his combined interest stayed under ₹1,00,000 at each institution, no bank deducted TDS, and since his total tax came to nil after the deduction, he had filed Form 15H at the start of the year as a precaution.

Using an RTI to settle a TDS or Form 15H dispute

If a bank or post office wrongly deducts TDS despite your valid Form 15H, or refuses to confirm how it processed your form, and it is a public sector bank or a government post office, you can use the Right to Information Act, 2005 to get answers. You can ask for the date your Form 15H was received and recorded, the reason TDS was deducted, and the internal note authorising it.

  1. Identify the public authority (the PSU bank branch or the postal circle) and its Public Information Officer.
  2. File an RTI under Section 6(1) asking for the dated record of your Form 15H and the TDS deduction reason.
  3. If you get no reply within 30 days under Section 7(1), file a first appeal under Section 19(1).

Our AI RTI Drafter can frame the application, the First Appeal Builder handles the appeal if you are ignored, and the PIO Reply Checker tells you whether the reply you got is complete. For a plain-language walkthrough of the whole process, see The RTI Playbook.

Common mistakes

  • Staying in the new regime by default. The new regime is the default; if you do nothing, you lose 80TTB. Opt for the old regime if it saves you more.
  • Claiming both 80TTA and 80TTB. A senior citizen cannot claim both. Use 80TTB.
  • Confusing the ₹50,000 deduction with the ₹1,00,000 TDS threshold. They are separate limits for separate purposes.
  • Assuming TDS means tax is final. TDS is only an advance collection; the actual tax depends on your slab after the 80TTB deduction. File your return to reconcile.

FAQ

What is the maximum deduction under Section 80TTB?

Up to ₹50,000 per financial year, or your actual eligible interest income if it is lower. The cap applies to all your eligible deposit interest combined, not per account.

Can NRIs claim Section 80TTB?

No. Section 80TTB is only for resident senior citizens. A non-resident Indian cannot claim it, even if aged 60 or above.

Is Section 80TTB available under the new tax regime?

No. It is a Chapter VI-A deduction, which the new regime under Section 115BAC does not allow. You must choose the old regime to claim it.

Can I claim both 80TTA and 80TTB?

No. A senior citizen eligible for 80TTB cannot also claim the ₹10,000 deduction under 80TTA. Choose 80TTB, which is larger and covers more deposit types.

Does 80TTB cover fixed deposit interest?

Yes. Section 80TTB covers interest from savings, fixed and recurring deposits with banks, co-operative banks and the post office. This is wider than 80TTA, which covers only savings interest.

What is the TDS threshold on FD interest for senior citizens now?

From 1 April 2025 the Section 194A threshold for senior citizens is ₹1,00,000 per year at a bank, co-operative bank or post office. Below this, no TDS is deducted.

How can a senior citizen avoid TDS on interest?

File Form 15H with the bank or post office if your total tax for the year will be nil. This stops TDS at source so you do not have to claim a refund later.

From which year is Section 80TTB applicable?

Section 80TTB applies from Assessment Year 2019-20, that is Financial Year 2018-19, after the Finance Act, 2018 introduced it.

Sources

Reviewed by Dr. Shrawan Kumar Pathak.

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