Budget 2024: Among the common investment options for common people, money kept in bank savings account or post office savings account is like saving. There is a rebate of Rs 10,000 in a financial year on the interest earned on money kept in these savings accounts.
Budget 2024: Among the common investment options for common people, money kept in bank savings account or post office savings account is like saving. There is a rebate of Rs 10,000 in a financial year on the interest earned on money kept in these savings accounts. That is, there is no tax on interest income of savings account up to Rs 10,000. Will the government increase this limit from Rs 10,000 to Rs 50,000? Union Finance Minister Nirmala Sitharaman will present the budget (Union Budget 2024) for the sixth time on 1 February 2024. Nirmala Sitharaman is going to present the last budget of the second term of the Modi government because after that Lok Sabha elections are going to be held across the country. In such a situation, will the government provide relief to the common people?
What are the rules now
According to Section 80TTA of the Income Tax Act 1961, if an individual (below 60 years of age) or a Hindu Undivided Family (HUF) earns interest income from the savings account maintained in banks, cooperative societies carrying on business, the total amount of Deduction up to Rs 10,000 can be claimed from income. It is important to mention here so that there is no confusion that taxpayers cannot avail this deduction for interest received on FD, Recurring Deposit, Post Office Time Deposit etc. Separate deduction of up to Rs 50,000 under Section 80TTB for senior citizens above 60 years, which is applicable on savings accounts, FDs and other interest income.
Separate deduction started on savings account interest from 2012
The government introduced deduction under Section 80TTA in Budget 2012 to promote small savings. However, the deduction limit has remained stable since then. The government can increase this deduction from the current Rs 10,000 to Rs 50,000. The government should consider doing this because there has been no change in it for a long time.
Right now this much interest is available on savings account
Currently, a savings bank account offers 3-4% interest annually. Interest on FD is available at 7% to 8.60%. However, some banks offer 7 or 6.5 percent interest on savings account but for that there should be more than a limit in the account.
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