New Delhi: Banks and financial institutions pitched for increasing tax deduction limit to Rs 2.5 lakh from currently Rs 1.50 lakh under 80C of Income Tax Act and bringing down maturity period for tax-free fixed deposit schemes to one year to promote domestic savings.
During their pre-Budget meeting with Finance Minister Arun Jaitley, they also demanded tax should be deducted on interest of above Rs 50,000 as against current Rs 10,000. In his opening remarks, Jaitley said there was considerable improvement in the opening of Basic Savings Bank Deposit Accounts (BSDAs) in 2015-16 following launch of Pradhan Mantri Jan Dhan Yojana (PMJDY).
“One major point that came out of the meeting was the overall savings in our country needs to be increased much further through a series of actions that needs to be taken so that we have domestic savings to create capital formation,” Yes Bank Managing Director Rana Kapoor said.
