look news india
Expectations of Budget 2025: The budget will be presented by the government soon. Both taxpayers and non-taxpayers have high expectations about the budget to be presented by Finance Minister Nirmala Sitharaman on 1 February. Before the budget, there is a discussion whether if you make FD in any bank, then there will be less tax on it or there will be no tax on it. Till now the interest received on FD was taxable. But banks are demanding that tax on FD be removed. Banks say that if the government decides to remove the tax, it will boost bank deposits.
Demand for tax exemption on FD
If this announcement is made by the Finance Minister, then it will greatly benefit those people who deposit money in banks and fulfill their needs from the interest earned on it. The news published on News 18 English has claimed that in the pre-budget meeting with Finance Minister Nirmala Sitharaman, financial institutions, especially banks, have demanded tax incentives on fixed deposits (FD). Their argument is that this will increase savings. This suggestion of banks has come in view of the recent decline in savings. This is the reason why banks are facing shortage of money to give loans.
Low tax on investment in stock market
According to the report, Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, gave suggestions to improve the efficiency and inclusivity of the capital market in the pre-budget meeting with the Finance Minister. He said recommendations were made to promote long-term savings in bonds and equity shares. According to reports, the Finance Secretary, Secretary of the Department of Investment and Public Asset Management (DIPAM), Secretary of the Department of Economic Affairs and Financial Services and the Chief Economic Advisor were also present in the meeting. Banks have told the government that if you deposit money in the bank then there should be less tax on it because there is less tax on keeping money in the stock market. This suggestion was given to encourage people to deposit more money in the bank.
How will it be beneficial?
If a person has an FD of Rs 10 lakh and is getting 8 percent interest annually, then he will get a total interest of Rs 4 lakh in five years. Let’s say FD interest up to Rs 40,000 is tax-free if it falls in the 30 per cent income tax bracket. The amount above this limit will have to be taxed as per the slab rate. According to the current rules, they have to pay 30 percent tax on Rs 3.60 lakh, which comes to Rs 1.08 lakh. But, if tax is applicable on investment in stock market (LTCG) here, then he will have to pay only 12.5% tax, i.e. a total of Rs 45,000. In this way he makes a profit of about Rs 63,000.