On the eve of the Union Budget, State Bank of India Chairman CS Setty expressed hope for a level playing field across financial savings instruments, stressing that fiscal prudence and consolidation will remain central to the government’s agenda.
Speaking at the launch of SBI’s Chakra initiative—a centre of excellence for financing sunrise sectors such as semiconductors, green hydrogen and data centres—Setty said the banking system cannot rely solely on deposit-driven capital to fund India’s next phase of infrastructure and technology expansion.
“There should be parity between bank deposits and other financial instruments. Globally, we have not seen special treatment for deposits, nor have equity instruments been given extraordinary benefits. In India’s evolving equity environment, it is time for a level playing field,” said Setty. He hoped the finance minister would consider removing taxation on savings deposits in the Budget to be presented on Sunday.
Taxation Gap
At present, returns on deposits attract taxation as per a taxpayer’s tax slab which may go up to 30%, while returns made on listed equities have lower or concessional rates with a 12.5% taxation on long-term capital gains of over Rs 1.25 lakh and 20% on short-term capital gains.
Chakra Initiative
Setty noted that the Budget should continue to prioritise fiscal consolidation while creating frameworks that enable both banks and non-banks to participate in long-term financing. He said the Budget can catalyse aligning taxation and incentives across savings instruments, fostering confidence in India’s growth story.
A senior SBI banker on the sidelines of the event said he expects the upcoming Budget to extend the 100% tax holiday at GIFT City (IFSC). With the current 10-year exemption—covering 0% capital gains and GST-free services—expiring in 2026, he said the finance minister might consider extending the incentive window, similar to Dubai IFC’s 50-year exemption, to maintain investor interest and confidence.