How are deductions for senior citizens' SCSS and fixed deposits treated in Income-Tax Bill 2025?

Under section 80TTB of the Income-Tax Act 1961, senior citizens can claim a deduction of up to ₹50,000 against interest income from bank and post office deposits. Further, under section 80TTA, general citizens can claim deduction of ₹10,000 against interest earned from savings account deposits.

The new Income-Tax Bill 2025, which was tabled in the parliament on Thursday (February 13, 2025) has omitted both sections and put them together in a new Section 153. However, the tax benefits under both the existing sections have been retained in the new bill.

What the new Income-Tax Bill 2025 says

As per section 153 of the Income-Tax Bill 2025, senior citizens will continue to claim tax deduction of ₹50,000 against interest income from savings accounts and time deposits in banks, post offices, and cooperative banks.

The new bill defines a time deposit as a deposit that is repayable on the expiry of fixed periods. In the case of senior citizens, time deposit would include fixed deposit and senior citizen savings scheme (SCSS) accounts.

Under the new bill, general citizens and Hindu undivided families (HUFs) are allowed a deduction of up to ₹10,000 only against savings account interest. They can’t claim interest deductions against fixed deposit income.

No deduction will be allowed under section 153 if the income is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons, or a body of individuals.