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CA Intermediate · Taxation · Deductions from Gross Total Income

Ritu Agarwal, a resident individual aged 34, has opted to be taxed under the old regime for tax year 2026-27. She earned interest of Rs 14,000 on her savings bank account and Rs 30,000 on a bank fixed deposit. Which amount can she claim as a deduction for interest on deposits?

The deduction is Rs 10,000. A non-senior individual can deduct savings account interest only, up to a ceiling of Rs 10,000. Her savings interest of Rs 14,000 exceeds this limit, and the fixed deposit interest of Rs 30,000 is not eligible for this deduction.

  1. ARs 10,000Correct
  2. BRs 14,000
  3. CRs 30,000
  4. DRs 44,000

Explanation

For an individual who is not a senior citizen, the deduction is for savings account interest only, capped at Rs 10,000. Her savings interest is Rs 14,000, so the cap applies. Fixed deposit interest of Rs 30,000 does not qualify. Claiming Rs 14,000 ignores the cap, and claiming Rs 44,000 adds FD interest wrongly.

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