Taxation - Income TaxMCQQuestion 5627 of 146
All Questions AHe shall be eligible for a deduction of ` 1,50,000 in respect of interest on
loan irrespective of the tax regime opted by him.
BHe shall not be eligible for any deduction under Chapter VI-A irrespective
of the tax regime opted by him.
CHe shall be eligible for a deduction of ` 1,50,000 in respect of interest on
loan only if he opts out of the default tax regime.
DHe shall be eligible for a deduction of ` 50,000 in respect of interest on
loan only if he opts out of the default tax regime.
(2 Marks)
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Correct Answer
✅ Option C — He shall be eligible for a deduction of ` 1,50,000 in respect of interest on loan only if he opts out of the default tax regime.
All Options:
- AHe shall be eligible for a deduction of ` 1,50,000 in respect of interest on loan irrespective of the tax regime opted by him.
- BHe shall not be eligible for any deduction under Chapter VI-A irrespective of the tax regime opted by him.
- CHe shall be eligible for a deduction of ` 1,50,000 in respect of interest on loan only if he opts out of the default tax regime. ✓
- DHe shall be eligible for a deduction of ` 50,000 in respect of interest on loan only if he opts out of the default tax regime. (2 Marks)
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Detailed Solution & Explanation
Under the default tax regime (Section 115BAC) of the Income-tax Act, 1961, deductions under Chapter VI-A (such as Section 80C, 80D, 80EEB, etc.) are generally not allowed.
- Section 80EEB provides a deduction of up to in respect of interest on a loan taken for purchasing an electric vehicle.
- If Mr. Desai opts out of the default tax regime (i.e. chooses the old tax regime), he becomes eligible to claim the deduction of under Section 80EEB.
- If he pays tax under the default tax regime, he cannot claim any such deduction.
- Thus, he shall be eligible for a deduction of in respect of interest on loan only if he opts out of the default tax regime.
Hence, **Option C** is the correct answer.
- Section 80EEB provides a deduction of up to in respect of interest on a loan taken for purchasing an electric vehicle.
- If Mr. Desai opts out of the default tax regime (i.e. chooses the old tax regime), he becomes eligible to claim the deduction of under Section 80EEB.
- If he pays tax under the default tax regime, he cannot claim any such deduction.
- Thus, he shall be eligible for a deduction of in respect of interest on loan only if he opts out of the default tax regime.
Hence, **Option C** is the correct answer.
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