24 June 2024 Punjab Khabarnama : Lenders are pitching for easier terms when it comes to taxing interest income for banks and funding assistance for small non-banking financial companies and microfinance institutions (MFIs) from the Union budget for 2024-25.
“If at all some relief could be given in the budget regarding tax on interest earnings, it will be an incentive to depositors. Eventually, the banking sector uses deposits mobilised for capital formation,” said Dinesh Khara, chairman, State Bank of India.
The budget is likely to be announced later in July.
Under current taxation laws, banks deduct tax on interest income earned on deposits if such income is over Rs 40,000 a year.
Similarly, an executive director of a bank does not expect big moves for the sector from the budget but he too hopes for a breather on the taxes front.