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‘Raise TDS cut-off on interest income’

NEW DELHI: If banks have their way, life for depositors – especially women and senior citizens – will get simpler. During a pre-budget meeting with finance minister Pranab Mukherjee on Thursday, the country’s top bankers suggested that the government should increase the limit on tax deducted at source (TDS) on interest from bank deposits to Rs 50,000, from Rs 10,000 at present.

While the move may not help you save taxes, it will be a boon for those with only interest as their source of income. Although several of them do not have any taxable income, they are forced to file tax returns just to get a refund as banks are forced to deduct TDS on interest income. “We have requested the FM to raise the TDS limit on deposits from Rs 10,000 to Rs 50,000,” said Naina Lal Kidwai, country head of HSBC bank, after a pre-Budget meeting at North Block. Kidwai said there were other important suggestions made such as easing gold loans terms and investments in equity.

Banks raised several other issues. For instance, they once again made a case for allowing banks to issue tax-free infrastructure bonds and emphasised the need for special incentives for people to invest in them. Besides, they suggested that the definition of the infrastructure be widened to include more sectors. They also want the government to rationalize transaction charges in the secondary market and introduce new measures to boost microfinance activity. After the meeting, Kotak Mahindra Bank vice-chairman and MD Uday Kotak said there was some signal of monetary easing, given the fact that inflation has come down and there is room for further cuts in cash reserve ratio.

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Posted by on Jan 20 2012. Filed under Business India News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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