The Hindu Business Line : Exempt FD interest

Businessmen use their savings to expand their business, not deposit them in bank fixed deposits. Senior citizens and salaried employees deposit their savings in fixed deposits to earn interest and to get back their money whenever needed.

These fixed deposits are used by banks to lend to entrepreneurs and commercial organisations for productive purposes.

These deposits indirectly help the development of the economy, without budgetary support.

The borrowers pay more taxes to the government, because of their expanded business.

At present, the interest earned on the fixed deposits is taxed as income and deducted at source.

Senior citizens, who depend on the interest income, face difficulties when claiming tax refunds.

The interest rates are being lowered gradually. As a result, fixed deposits have become unattractive.

Yet, senior citizens do not have any other option.

In view of all this, the Government may exempt the interest income from fixed deposits in nationalised/scheduled banks from income-tax.

A. S. Mahaboob Jan, Chennai

More Stories on : Budget | Income Tax | Fixed Deposits

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