Skip to content

CA Intermediate · Taxation · Deductions from Gross Total Income

Meera Iyer, aged 35, is a resident individual who has opted for the old tax regime for tax year 2026-27. She earned interest of Rs 14,000 on her savings bank account and Rs 20,000 on a bank fixed deposit. Both amounts are included in her income from other sources. What is the maximum deduction available to her for interest income?

The deduction is Rs 10,000. For an individual below 60, the deduction covers savings account interest only and is capped at Rs 10,000. Her savings interest of Rs 14,000 exceeds the cap, and fixed deposit interest does not qualify for this deduction at all.

  1. ARs 10,000Correct
  2. BRs 14,000
  3. CRs 24,000
  4. DRs 34,000

Explanation

A non-senior individual can claim a deduction for savings account interest only, limited to Rs 10,000. Fixed deposit interest does not qualify. Savings interest is Rs 14,000, so the deduction is the lower of Rs 14,000 and Rs 10,000, which is Rs 10,000. Rs 14,000 ignores the cap, and Rs 34,000 wrongly includes the FD interest.

Did you get it right without looking?

One question tells you little. A timed set on Deductions from Gross Total Income shows your real accuracy, how long you take and where you lose marks.

Practise Deductions from Gross Total IncomeFree diagnostic mock

More Deductions from Gross Total Income questions