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. ₹25,000
B. ₹50,000
C. ₹1,00,000
D. ₹10,000
Answer: Option B
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).
Explanation:
The matching concept ensures that all expenses incurred to earn a specific revenue are recognized in the same accounting period to find the true profit.
A: Revenue is recognized when the significant risks and rewards of ownership are transferred. R: This is based on the Realization Concept. Choose the correct option.
A.Both A and R are true and R is the correct explanation of A
B.A is false but R is true
C.A is true but R is false
D.Both A and R are true but R is NOT the correct explanation of A
Explanation:
The Realization Concept dictates that revenue is recognized when the legal right to receive payment is established, typically upon transfer of risks and rewards. R correctly identifies the concept.
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