If you’ve ever looked at your bank savings account interest and wondered, “Do I have to pay tax on this?”, you’ve probably come across Section 80TTA of the Income Tax Act.
Traditionally, this section allowed taxpayers to claim a deduction on the interest earned from savings bank accounts. But with the government’s push towards the new tax regime, many are asking: “Is Section 80TTA deduction still available in the new regime?”
Let’s break it down in simple terms.
What is Section 80TTA in new tax regime?
Section 80TTA provides a deduction of up to ₹10,000 per year on interest earned from:
- Savings bank accounts,
- Post office savings accounts, and
- Cooperative society savings accounts.
This benefit is available to individual taxpayers (below 60 years) and HUFs. Senior citizens get a higher benefit under Section 80TTB (₹50,000).
👉 However, under the new tax regime, Section 80TTA is not available.
- The new regime (under Section 115BAC) has removed most exemptions and deductions, including 80TTA.
- This means if you opt for the new tax regime, you will have to pay tax on your savings account interest as per the applicable slab rate.
On the other hand, if you choose the old tax regime, you can still claim the ₹10,000 deduction under Section 80TTA.
Is 80TTA deduction available in the new tax regime for FY 2025–26?
The short answer is No.
Under the new tax regime (Section 115BAC), most traditional deductions and exemptions have been removed, including Section 80TTA. This means:
- Any interest earned from savings bank accounts will now be taxed as part of your “Income from Other Sources.”
- It will be taxed according to the slab rate applicable to your income under the new regime.
- You cannot claim the ₹10,000 deduction under 80TTA if you are under the new regime.
👉 Example:
If you earn ₹8,000 interest from your savings account in a financial year:
- Old regime → You can claim this under 80TTA (up to ₹10,000) and pay no tax on it.
- New regime → The ₹8,000 gets added to your income and taxed as per slab rates.
This is why taxpayers with significant savings account interest may still prefer the old regime, especially if combined with other deductions.
What is the difference between 80TTA and 80TTB?
Many people confuse Section 80TTA and Section 80TTB, but they are meant for different groups of taxpayers:
| Feature | Section 80TTA | Section 80TTB |
| Who can claim? | Individuals (below 60 years) & HUFs | Senior citizens (60 years & above) |
| Deduction limit | Up to ₹10,000 on savings account interest | Up to ₹50,000 on all interest income (savings, FD, post office, etc.) |
| Available under new regime? | ❌ No | ❌ No |
| Available under old regime? | ✅ Yes | ✅ Yes |
👉 In short:
- 80TTA is for younger taxpayers and HUFs (max ₹10,000).
- 80TTB is for senior citizens (max ₹50,000).
- Neither of these are available in the new tax regime.
Should you switch to the new tax regime if you lose 80TTA deduction?
Losing the 80TTA deduction might sound like a drawback, but in reality, it may not affect you much under the new tax regime. Here’s why:
- Higher tax-free threshold
In FY 2025–26, income up to ₹12–12.75 lakh is tax-free in the new regime. So, even if your savings interest is taxable, you may still end up paying zero tax.
- Lower tax rates
The new slab rates (5%, 10%, 15%, etc.) are much lower compared to the old regime. This often offsets the loss of deductions like 80TTA.
- Simplicity
With no need to claim exemptions, tax filing becomes hassle-free.
👉 In short: If your only deduction was 80TTA, the new tax regime is almost always better—because the savings on lower tax rates and rebates far outweigh the ₹10,000 deduction.
Who benefits more under the old regime with 80TTA?
While most taxpayers are better off under the new regime, the old system still has its advantages for certain groups:
- People with multiple deductions
If you already claim 80C, 80D, HRA, or home loan interest, adding 80TTA makes the old regime even more tax-efficient.
- Taxpayers with high savings interest
If you keep large balances in savings accounts (for emergencies or business reasons), claiming the ₹10,000 deduction can reduce your taxable income slightly.
- Those in lower income brackets
If your income is below ₹5–6 lakh and you combine 80TTA with other deductions, the old regime can sometimes result in lower or zero tax liability.
👉 In short: 80TTA alone won’t justify the old regime. But when combined with other deductions, it can still tilt the scales in its favour.
Conclusion
Section 80TTA has always been a small but useful tax-saving tool for interest earned on savings bank accounts. Under the old regime, you can still claim up to ₹10,000 as a deduction.
However, under the new tax regime (Section 115BAC), the 80TTA deduction is not available. Instead, savings account interest is simply added to your income and taxed as per the applicable slab rate.
But here’s the good news: with the recent tax slab changes in 2025, most taxpayers earning up to ₹12–12.75 lakh already pay zero tax under the new regime. This makes the loss of 80TTA less important for the majority of middle-class earners.
💡 In short: 80TTA still matters if you stick to the old regime, but under the new tax regime, the generous slab rates make up for it.
FAQs on 80TTA in New Tax Regime
1. What is Section 80TTA of the Income Tax Act?
It allows a deduction of up to ₹10,000 per year on interest earned from savings accounts in banks, post offices, and cooperative societies.
2. Is 80TTA deduction available in the new tax regime?
No. Under Section 115BAC (new tax regime), the 80TTA deduction is not available.
3. Can I still claim 80TTA under the old regime in FY 2025–26?
Yes. If you choose the old regime, you can claim up to ₹10,000 as a deduction under Section 80TTA.
4. What is the difference between 80TTA and 80TTB?
- 80TTA: For individuals below 60 years and HUFs, limit = ₹10,000.
- 80TTB: For senior citizens, limit = ₹50,000 (includes savings + FD interest).
5. Does losing 80TTA make the new regime less attractive?
Not really. Since the new regime offers zero tax up to ₹12–12.75 lakh, the benefit of 80TTA is very small compared to the overall relief in slab rates.
6. Who benefits from 80TTA in the old regime?
People with large savings balances, or those already claiming multiple deductions like 80C, 80D, and HRA, may find the old regime plus 80TTA more beneficial.
