Budget 2024: Savings account interest up to Rs 25,000 may get tax exempt
«It is under review, and there could be some relief for banks, which have demanded incentives to shore up deposits,» said a government official.
A final call on the proposal will be taken closer to the budget announcement.
The 2020 budget had introduced a separate income tax regime that was simpler but eschewed exemptions, allowing taxpayers to choose depending on their financial circumstances.
Under the older tax regime, interest earned up to Rs 10,000 annually from savings accounts is tax-exempt under Section 80TTA of the Income Tax Act. For senior citizens, aged 60 and above, this limit is pegged at Rs 50,000 and includes interest income earned from fixed deposits under Section 80 TTB.
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Under the new tax regime, these benefits were withdrawn. However, under Section 10(15)(i), taxpayers receiving interest on their Post Office savings accounts can claim exemptions up to Rs 3,500 for individual accounts and Rs 7,000 for joint accounts. Banks want the benefits under both tax regimes.
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«Both issues, including enhancement of the old limit and allowing interest income earned from savings accounts in scheduled commercial banks (SCBs) under existing regulations in the new regime, are being deliberated,» said the person cited above, adding that lenders had earlier made a presentation on this issue.
