Budget 2024 Expectations: SBI chief pitches for tax relief on interest income

Ahead of the rollout of Union Budget 2024-25, State Bank of India (SBI) chairman Dinesh Khara has sought relief from tax on income earned in the form of interest on bank deposits.

The move, according to Khara, will encourage people to park their investments in the form of deposits, and will allow banks to mobilise the same for capital formation.

"If at all some relief could be given in the Budget regarding tax on the interest earnings, it will be an incentive to depositors. Eventually, the banking sector uses deposits mobilised for the capital formation in India," the SBI chief said, during an interview with news agency PTI.

Presently, interest on deposits in excess of ₹40,000 a year is added to the taxable income.

Notably, Finance Minister Nirmala Sitharaman is expected to present the Union Budget in the second half of July. She has been meeting several industry lobbies and other stakeholders as part of the pre-budget consultations.

Tweak in income tax rates on cards?

The government could slash the income tax rate for those earning an annual income between ₹5 lakh to ₹15 lakh, news agency Bloomberg reported on June 21, citing sources.

Under the old tax regime, a levy of 30% is imposed on those earning above ₹10 lakh. However, those opting to be taxed under the old regime are allowed to claim higher tax deductions.