Question

For the assessment year 2018-19, what is the maximum deduction available under section 80TTA of the Income Tax Act 1961?

1. Rs. 7,000
2. Rs. 3,000
3. Rs. 5,000
4. Rs. 10,000

Answer 1

Correct Answer - Option 4 : Rs. 10,000

Section 80TTA provides a deduction of Rs 10,000 on interest income. This deduction is available to an Individual and HUF.

Maximum Deduction Allowed Under Section 80TTA

• The maximum deduction is limited to Rs 10,000. If your interest income is less than Rs 10,000, the entire interest income will be your deduction. If your interest income is more than Rs 10,000, your deduction shall be limited to Rs 10,000. (You have to consider your total interest income from all banks where you have accounts).

Therefore option no. 4 is correct.

Which Type of Interest Income are Allowed as Deduction Under Section 80TTA

• From a savings account with a bank
• From a savings account with a cooperative society carrying on the business of banking
• From a savings account with a post office.