TaxSaral
Section 149Deductionswas Section 80TTA in IT Act 1961

Savings Account Interest (₹10,000)

Deduction up to ₹10,000 on interest earned from savings bank accounts with banks, co-operative societies, and post offices. Not for FDs. Not available to senior citizens (use Section 150 instead).

Who this applies to

Non-senior-citizen taxpayers who earn savings account interest and use the optional regime.

Key Points

  • Only savings account interest qualifies — FD, RD, and other deposit interest do NOT.
  • Deduction is up to ₹10,000 — even if your savings interest is ₹25,000, only ₹10,000 is deducted.
  • Senior citizens (60+) should use Section 150 instead — it covers all deposits and gives up to ₹50,000.
  • Not available under the default (new) regime.

Worked Example

1

Savings interest just over the limit

Scenario

Aryan has ₹15,000 savings bank interest and ₹45,000 FD interest in TY 2026-27. He is in the 10% slab and uses the optional regime.

Calculation

Savings interest: ₹15,000 → deduction capped at ₹10,000
FD interest: ₹45,000 → NOT covered by Section 149, fully taxable

Deduction under Section 149: ₹10,000
Taxable interest income:
  Savings: ₹15,000 – ₹10,000 = ₹5,000
  FD: ₹45,000
  Total taxable: ₹50,000

Tax at 10%: ₹5,000

Result

Aryan saves ₹1,000 in tax (₹10,000 × 10%) from Section 149. His FD interest remains fully taxable. Senior citizens are better served by Section 150 which covers FD interest too.

Related Sections

Section 150Senior Citizen Deposit Interest (₹50,000)
Section 123Investments & Insurance Premium (₹1.5L limit)

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Section references are based on the Income Tax Act 2025 (Tax Year 2026-27). Examples are illustrative — verify with a Chartered Accountant before filing.