• Notification Date: 06-02-2025
• Notification No: N/A

Union Budget 2025: Proposals will give Bank Deposits a Rs 45,000 crore boost

The Union Budget 2025 has proposed some key plans that could potentially increase bank deposits by as much as Rs. 45,000 crore through the changes in targeted income tax. Financial Services Secretary M Nagaraju said the budget introduces significant hikes in tax deductions and savings limits, which should bring in good inflows to the banking system.

There would be a massive proposal to hike the TDS threshold on the interest earned through fixed deposits. The exemption limit for an ordinary taxpayer would rise from Rs. 40,000 to Rs 50,000 per financial year. The case of senior citizens would be much more beneficial where the TDS threshold on interest income from fixed deposits would be allowed to jump to Rs. 1 lakh from Rs. 50,000 from FY2025-26. These measures are most likely to elicit a re-inflow of more than Rs. 20,000 crore from general and of Rs 15,000 crore from senior citizens depositors, respectively.

Adjustment in income tax slabs would bring approximately Rs. 7,000 crore in savings. Along with that, NPA account resolution has also been proceeding in line with the RBI directive in which it transferred Rs. 1 lakh crore worth of NPA accounts to the National Asset Reconstruction Company Limited.

Such strategies involve proposals that are likely to make the financial system stronger, hence mobilize much additional deposit inflow to the banks.