Interest income up to Rs 50,000 on savings accounts, fixed deposits and recurring deposits for senior citizens is exempted from income tax under section 80TTB. SBI Research in its recent report has suggested that this limit should be increased.
New Delhi. Senior citizens can get a big gift in the Union Budget 2023 to be presented on February 1. In fact, SBI Research has suggested to increase the tax limit on the interest received by senior citizens in various savings schemes. Interest income up to Rs 50,000 on savings accounts, fixed deposits and recurring deposits for senior citizens is currently exempt from income tax under section 80TTB. SBI Research in its recent report has suggested that this limit should be increased.
Dr Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI said, “Interest income up to Rs 50,000 from deposits by senior citizens (savings bank accounts, FDs, recurring accounts) is exempt from income tax under section 80TTB. This limit has been increased to Rs. 75,000/1 lakh, the fiscal cost of which would still be very low.”
What is Section 80TTB?
Section 80TTB of the Income Tax Act allows senior citizens above 60 years of age to avail tax exemption on bank interest. With the help of this, they can exclude the interest of up to Rs 50 thousand every year from their income. Deduction under this section can also include interest on fixed deposits and recurring deposits.
SBI Research also suggested that the government should increase the maximum age limit for membership of Sukanya Samriddhi Yojana to 12 years to encourage small savings deposits.
Government will focus on small savings schemes
In this report, it is expected that the government will continue to rely on small savings schemes to improve the fiscal deficit in FY24. SBI Research has estimated the real GDP growth in FY24 to be around 6.2%. SBI Chief Economic Advisor said, “For FY24, real GDP growth is expected to be around 6.2%. GDP will increase by 9.8% to Rs 300 lakh crore in the budget of FY24.