Section 153 - Deduction for interest on deposits
The section consolidates deposit-interest relief. A non-senior individual or HUF can deduct up to ₹10,000 of savings-account interest; a senior citizen can deduct up to ₹50,000 of interest on any eligible deposit account.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 153 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
The section consolidates deposit-interest relief. A non-senior individual or HUF can deduct up to ₹10,000 of savings-account interest; a senior citizen can deduct up to ₹50,000 of interest on any eligible deposit account.
Who should use this section
Individuals and HUFs earning savings interest, and resident senior citizens earning eligible deposit interest, who must choose the correct statutory lane.
Old-law bridge
Sections 80TTA and 80TTB
The old-law bridge is navigational, not automatic precedent transfer. Match the 1961 Act wording, saved proceedings, current 2025 Act text and effective date before importing an older interpretation.
Finance Act 2026 / current-law note
No section-specific Finance Act, 2026 textual substitution is separately flagged for section 153; the consolidated post-Finance-Act-2026 text remains the controlling version and must be used instead of pre-1 April 2026 extracts.
Professional alert
Do not combine both limits. Interest from firm, AOP or BOI deposits attributable to a member is excluded by subsection (3).
Connected Income-tax Rules, 2026 and Forms
| Rule | Current control | Form |
|---|---|---|
| No provision-specific Rule/Form is directly prescribed for this section in the mapping used here. Apply the statute directly and check the current Rules where another provision cross-refers to them. | ||
Worked application
A non-senior individual earns ₹13,000 savings interest and ₹40,000 fixed-deposit interest. Only savings interest is eligible and the deduction is capped at ₹10,000. A senior citizen may access the separate ₹50,000 any-account rule.
Evidence / compliance checklist
- Preserve the primary agreement, certificate, account statement or transaction record that establishes the facts relevant to section 153 (Deduction for interest on deposits).
- Reconcile the section 153 amount to books, return schedules and third-party evidence so the computation can be reproduced without relying on a narrative assertion.
- Keep the current-law source and any prescribed Rule/Form evidence with the tax-year file for section 153; do not rely on a legacy 1961 Act form merely because the section has an old-law bridge.
- Where section 153 contains a threshold, election or time limit, retain dated evidence proving that the condition was satisfied before the return or proceeding was finalised.
Common mistake
A common section 153 error is to apply the old-law label or headline rate without rebuilding the current statutory conditions. For “Deduction for interest on deposits”, the safer control is to test the exact taxpayer/transaction facts, the operative tax year, every linked Rule/Form and the Finance Act 2026 consolidated wording. Do not combine both limits. Interest from firm, AOP or BOI deposits attributable to a member is excluded by subsection (3).
Recommended approach
For section 153, start with the legal trigger in “Deduction for interest on deposits”, document the evidence for that trigger, then run the computation or procedural step against the current text. As a cross-check, verify this provision-specific checkpoint: Non-senior individual/HUF savings-account interest deduction: up to Rs 10,000.
Thresholds, periods and timing checkpoints
- Non-senior individual/HUF savings-account interest deduction: up to Rs 10,000.
- Resident senior-citizen eligible deposit-interest deduction: up to Rs 50,000.
- The two relief routes are alternatives, not cumulative deductions on the same income.
Related provisions and interaction map
Section 153 sits within the Chapter VIII deduction framework; also test section 202 restrictions where relevant and the return/audit provisions governing this specific claim.
Current statutory text
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Quoting note: Use the official consolidated Act for verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 case automatically decide section 153?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which text should be quoted in advice or litigation?
Quote the consolidated official statute for the relevant tax year. If this page presents a provision summary rather than complete statutory text, use the official consolidated Act for verbatim legislative language.