Govt. collects Rs 27k cr in taxes from senior citizens on FD
interest
Govt. collects Rs 27k cr in taxes from senior citizens on interest
earned from fixed deposits: SBI report Mumbai, Apr 15 (PTI) The government has
likely mopped up over Rs 27,000 crore in taxes from senior citizens on the
interest they earned on term deposits last fiscal, researchers at the country's
largest lender SBI said.
According to the report by SBI researchers, the total amount of
deposits has risen by 143 per cent in the last five years to Rs 34 lakh crore
at the end of FY24 from Rs 14 lakh crore.
High-interest rates also seem to have led to higher interest among
the senior citizens to invest in fixed deposits, as the total number of term
deposit accounts grew 81 per cent to 7.4 crore in the same time period, the
report said.
SBI researchers estimated that at least 7.3 crore of these
accounts have a balance of over Rs 15 lakh, and assuming that the deposits
fetch an interest of 7.5 per cent, senior citizens have earned Rs 2.7 lakh
crore in FY24 as interest alone.
This includes Rs 2.57 lakh crore from the bank deposits and the
remaining from the Senior Citizen Saving Scheme, the report said.
"By assuming 10 per cent (average) tax paid by the senior
citizens harmonised across cohorts, the tax mop-up by Government of India would
come around Rs 27,106 crore," the report said.
Senior citizens' share in the incremental term deposits has gone
up to 30 per cent now from 15 per cent five years earlier, it said.
"The increase in deposit rates, the higher interest rate
differential for senior citizens and the special deposit schemes for senior
citizens have all propelled a tectonic shift in deposit accretion for senior
citizens," the report said.
The government's move to hike the threshold of TDS (tax deducted
at source) on deposits for senior citizens to Rs 50,000 is working as an
additional fillip for deposit mobilisation for senior citizens, it added.
The report said some banks have been aggressive in wooing deposits
amid the fluctuating liquidity constraints, which has resulted in the banking
system raising the deposit rate in the latter half of FY24 despite the RBI
holding the rate since February 2023.
The "palpable shift" in depositors' behaviour has been
the inclination to capitalise on interest rate differentials between core and
term deposits, with the incremental share of term deposits increasing to 93 per
cent and that of the low-cost current and saving accounts declining to 7 per
cent in FY24, the SBI economists estimated.
www.business-standard.com
dt. 16.04.2024