Budget 2024: Nirmala Sitharaman's May Plan to Boost Savings with Tax Relief

According to the current tax regime, individuals benefit from tax exemptions on interest income from savings accounts up to Rs 10,000 annually, as per Section 80TTA of the Income Tax Act. Senior citizens aged 60 and above enjoy a higher exemption limit of Rs 50,000, which encompasses interest income from savings accounts and fixed deposits under Section 80TTB. These structures are designed to ease the tax burden on savings and provide additional financial relief, particularly for senior citizens, encouraging prudent financial planning and savings.

In the Budget 2024, under the guidance of Finance Minister Nirmala Sitharaman, we are expecting a transformative vision for India's economic landscape. This could potentially be a pivotal moment for India's economy, paving the way for both recovery and growth. As per the reports, the government of India is considering raising the tax-deductible limit on interest from saving accounts to Rs 25,000.
 
As India's Finance Minister Nirmala Sitharaman is all set to present the Union Budget on July 23 in Parliament, banks have suggested deposit incentives in a recent meeting with finance ministry officials to address concerns about the widening credit-deposit ratio, as reported by the Economic Times.

Impact on Individual Taxpayers

For individual taxpayers, especially middle-income earners, and retirees relying on savings, the proposed tax relief on savings interest could translate into tangible financial benefits. By reducing the tax burden on interest earnings, the government aims to encourage savings mobilization, which is crucial for personal financial security and long-term wealth accumulation.