Budget proposals to garner up to Rs 45,000 cr bank deposit: DFS Secy

TDS threshold for fixed deposit interest income earned by senior citizens will go up from Rs 50,000 to Rs 1 lakh from FY2025-26, Financial Services Secretary M Nagaraju said

Budget proposals for income tax cuts and other tax changes will help banks to mobilise Rs 40,000-45,000 crore additional deposits, Financial Services Secretary M Nagaraju on Monday said.

The Union Budget 2025 has proposed an increase in the tax deduction at source (TDS) threshold on interest earned from fixed deposits for general (non-senior) citizens from the current Rs 40,000 to Rs 50,000 per financial year.

The TDS threshold for fixed deposit interest income earned by senior citizens will go up from Rs 50,000 to Rs 1 lakh from FY2025-26, he said.

"We see over Rs 20,000 crore coming back into the banking system due to the hike in tax rebate limit, over Rs 15,000 crore from the hike in TDS threshold on interest earned from savings deposits by senior citizens," he said in a post-Budget media briefing.

Besides these two, Rs 7,000 crore is seen coming from the non-senior individuals tax savings due to the income tax slab changes, he added.

Asked about MTNL debt resolution and haircut that banks are willing to take, banks will decide based on extant norms.

"Have you seen banks taking haircut before the loan is restructured (or taken for resolution under IBC...we all follow RBI guidelines," he said.

With regard to National Asset Reconstruction Company Limited (NARCL), he said 24 NPA accounts have been transferred by lenders worth Rs 1 lakh crore.