Interest Income Tax (80TTA/80TTB)
Work out the tax on your savings and FD/RD interest at your slab — and see how much the 80TTA or 80TTB deduction saves you, live. Applicable for FY 2026-27 (AY 2027-28) and FY 2027-28.
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How your interest is taxed
Report your interest income correctly in your ITR
A CA checks your 26AS/AIS, claims 80TTA/80TTB and reconciles TDS so you never get a mismatch notice.
Disclaimer: Indicative estimate for individual residents. Tax on interest depends on your total income and marginal slab; TDS deducted is adjustable against final liability. Rates per Finance Act 2025.
Tax on interest income — the essentials
Interest from savings accounts, fixed deposits and recurring deposits is fully taxable under “Income from Other Sources” and added to your total income, where it is taxed at your marginal slab rate. Two special deductions soften the blow — but only if you file under the old regime.
80TTA vs 80TTB — which applies to you
You claim one, not both. Non-seniors get a small ₹10,000 deduction on savings interest only; senior citizens get a far larger ₹50,000 that also covers FD and RD interest.
| Max deduction | ₹10,000 |
| Covers savings interest | Yes |
| Covers FD / RD interest | No |
| Available to seniors | No |
| Regime | Old only |
| Max deduction | ₹50,000 |
| Covers savings interest | Yes |
| Covers FD / RD interest | Yes |
| Available to non-seniors | No |
| Regime | Old only |
TDS on interest — Section 194A
Banks deduct TDS at 10% on FD/RD interest once it crosses the annual threshold — ₹40,000 for non-seniors and ₹50,000 for senior citizens (per bank). This TDS is not an extra tax; it is adjusted against your final liability when you file your return, and any excess is refunded.
Threshold
No TDS if bank interest is within the threshold. Above ₹40,000 (non-senior) or ₹50,000 (senior) per bank, TDS applies on the whole interest.
Rate
TDS is deducted at 10% when PAN is provided; it jumps to 20% if PAN is not furnished to the bank.
Savings interest
No TDS is deducted on ordinary savings-account interest — but it is still taxable and must be declared in your ITR.
Form 15G / 15H
If your total income is below the taxable limit, submit 15G (non-senior) or 15H (senior) so the bank does not deduct TDS.
Questions people ask
Short answers on Interest Income Tax. Tap a question to open it.
01How is interest income taxed?
Interest from fixed deposits, recurring deposits, savings accounts, bonds and loans is taxed under "income from other sources" at your slab rate. It is taxable on accrual, so FD interest is reported every year even if paid at maturity.
02What is the difference between 80TTA and 80TTB?
Section 80TTA gives an individual below 60 a deduction of up to ₹10,000 on savings account interest only. Section 80TTB gives a resident senior citizen up to ₹50,000 on savings and fixed deposit interest together. Both are old-regime only, and only one applies to a person.
03When does the bank deduct TDS on interest?
Under section 194A once interest across your deposits at that bank exceeds ₹50,000 in the year, or ₹1,00,000 for a senior citizen. Savings-account interest is outside 194A, so no TDS is deducted on it.
04Is interest on a PPF or tax-free bond taxable?
No. PPF interest is exempt, as is interest on notified tax-free bonds. Interest on EPF is exempt within the prescribed contribution limits, and taxable on the excess.
05Do I have to report interest even if TDS was deducted?
Yes. TDS at 10% is only a part payment — the income must be reported and taxed at your slab rate, with the TDS claimed as credit. Interest income shows in your AIS, so omitting it triggers a mismatch.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.