For example :An individual 'X' who is in 20% slab rate of income tax. HAs IFOS from Interest on saving bank A/c of Rs. 30,000/-. So the right way to compute his tax 1) 30,000 X 20/100 or 2) 30,000 X 20/120.
Any option you choose pls explain why?
thanks in advance guys
Dear Prash,
You should calculate tax according to slab rates.
Further, U/s 80TTA, deduction upto Rs 10000/- of interest from saving account can be claimed.
Rs. 30,000/- interest added in your total income and taxed according to your tax slab , and Rs. 10,000/- is deducted u/s 80TTA.
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