Work out tax on savings account and fixed deposit interest in India, with the right relief under section 80TTA or 80TTB, the cess, and the senior citizen TDS threshold.
Can I claim 80TTA on my fixed deposit interest?
No. Section 80TTA is limited to interest on a savings account held with a bank, a co-operative bank or a post office. Interest from a fixed or recurring deposit gets no relief under it. This is the single commonest error on this subject, because the ₹10,000 figure is well known and the savings-only restriction is not.
Can a senior citizen claim both 80TTA and 80TTB?
No, they are mutually exclusive. A resident senior citizen claims 80TTB, which is both larger at ₹50,000 and wider, since it covers fixed and recurring deposit interest as well as the savings account. Adding 80TTA on top would be a double claim on the same interest.
Do these deductions work under the new regime?
No. Both are Chapter VI-A deductions and the new regime allows almost none of them, so all your interest is taxable there. That does not automatically make the old regime better, because the new regime has wider slabs. Compare the whole position on the old versus new regime page rather than on this one relief.
The bank already deducted TDS. Do I still owe this?
TDS is not the final tax, it is a payment on account. The figure on this page is what the interest actually costs you; the TDS already deducted is set against it when you file, and any excess comes back as a refund. If your total income is below the taxable limit you can file Form 15G, or 15H if you are a senior citizen, to stop the deduction happening.
Why is the effective rate lower than my slab rate?
Because part of the interest escapes tax through the deduction. If ₹10,000 of ₹52,000 is deducted and the rest is taxed at 30% plus cess, the tax works out to about 25% of the whole interest rather than 31.2%. The effective rate is the number worth comparing against another investment.
Which slab rate should I enter?
The rate that applies to the top slice of your income, since interest is added on top of everything else. If you are unsure, run your total income through the income tax page first and use the marginal rate it shows. If your interest straddles two slabs the true answer lies between them.