Under the Income Tax Act, the deduction under Section 80TTA is available for interest earned on savings bank accounts. What is the maximum limit for this deduction? MCQ with Answer and Explanation

Under the Income Tax Act, the deduction under Section 80TTA is available for interest earned on savings bank accounts. What is the maximum limit for this deduction?
A. ₹10,000
B. ₹25,000
C. ₹50,000
D. ₹1,00,000
Answer: Option C
Solution (By JKSSB Mock Tests)
Section 80TTA allows a deduction of up to ₹50,000 for interest income earned from savings accounts maintained with banks or co-operative societies. (Note: 80TTB provides ₹50,000 for senior citizens on all deposits).

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: Social accounting reports the social and environmental impact of a business. S2: Social audit is a formal assessment of a company's social accounting systems. Which statement(s) is/are correct?
A. S1 only
B. Both S1 and S2
C. S2 only
D. Neither S1 nor S2

Correct Answer: Option B


Explanation:
Social accounting communicates the social and environmental effects of a company's actions. Social audit is the systematic evaluation of these social accounting reports to ensure accountability. Both are correct.

Question #2
The 'Audit Documentation' (working papers) is the property of:
A. Auditor
B. Client
C. Shareholders
D. Government

Correct Answer: Option A


Explanation:
Working papers belong to the auditor; client does not have a right to them.

Question #3
The journal entry for goods withdrawn by the proprietor for personal use is:
A. Drawings A/c Dr. To Sales A/c
B. Capital A/c Dr. To Purchases A/c
C. Drawings A/c Dr. To Purchases A/c
D. Purchases A/c Dr. To Drawings A/c

Correct Answer: Option C


Explanation:
Goods taken for personal use reduce drawings and reduce purchases (or stock). Correct entry: Drawings A/c Dr. To Purchases A/c.