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Budget 2023: SBI report suggests enhancing tax relief on interest income for senior citizens

The finance minister can announce measures in Budget 2023 that can lower the tax bill of senior citizens who are reeling from high inflation. The lower tax bill will allow them to manage their household budget better.

January 23, 2023 / 05:37 PM IST
Relief to senior citizens can be given by increasing exemption threshold on interest from savings, FDs and RDs.

Relief to senior citizens can be given by increasing exemption threshold on interest from savings, FDs and RDs.

Senior citizens have pinned their hopes on finance minister Nirmala Sitharaman to provide relief to the segment in the Union Budget for 2023-24 as they grapple with squeezing disposable income on account of rising cost of day-to-day items and healthcare.

One of the recommendations for the finance minister is to increase the threshold for interest exemption from the current Rs 50,000 to Rs 75,000-Rs 1 lakh.

“Under 80TTB interest income from deposits by senior citizen (Savings bank accounts, fixed deposits, recurring deposit accounts) up to Rs 50,000 is exempted from income tax. This threshold may be increased to Rs 75,000 / Rs 1 lakh which still will have much lower fiscal cost,” the latest ecowrap report from SBI Research said.

The report expects the fiscal deficit for FY24 at 6 per cent of the GDP. This will result in a consolidation of 40 basis points from the current fiscal, the report said.