Income Tax expectations Budget 2024: Tax exempt limit for savings account interest to be raised to Rs 25,000?

Budget 2024 Income Tax Expectations: Ahead of the Union Budget 2024 presentation by Finance Minister Nirmala Sitharaman, the federal government is at present evaluating a proposal to increase the tax-deductible limit on interest revenue from savings accounts to Rs 25,000.
This suggestion was put ahead by banks throughout a latest assembly with key officers from the finance ministry.Banks have been advocating for deposit incentives due to growing considerations in regards to the widening credit-deposit ratio.
“It (the suggestion) is under review, and there could be some relief for banks, which have demanded incentives to shore up deposits,” a authorities official was quoted as saying in an ET report by Dheeraj Tiwari. The ultimate choice on the proposal will be made nearer to the price range announcement.

Under the previous tax regime, interest revenue up to Rs 10,000 per 12 months from savings accounts is tax-exempt underneath Section 80TTA of the Income Tax Act. For senior residents aged 60 and above, this limit is ready at Rs 50,000 and contains interest revenue from mounted deposits underneath Section 80 TTB. However, these advantages had been eliminated underneath the brand new tax regime, when it was launched within the 2020 price range.
“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,” mentioned the individual cited above, noting that banks had beforehand made a presentation on this matter.
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The Reserve Bank of India (RBI) noticed in its newest Financial Stability Report that households are diversifying their monetary savings, allocating extra to non-banks and the capital market.
The report highlighted that the rising hole is mirrored within the rising credit-deposit (C-D) ratio, which peaked at 78.8% in December 2023 earlier than moderating to 76.8% on the finish of March.
Recently, HDFC Bank, the nation’s largest personal sector lender, reported a 5% sequential decline in its present account-savings account (CASA) deposits to Rs 8.63 lakh crore through the first quarter of the present monetary 12 months.