Section 80TTB Income Tax exemption limit for senior citizens: Interest income of up to Rs 50,000 from savings accounts, fixed deposits and recurring deposits is currently exempted from income tax for senior citizens under Section 80TTB of the Income Tax Act. SBI Research suggests in its recent report that this limit should be increased to Rs 75,000/Rs 1 lakh.
“Under 80TTB interest income from deposits by senior citizen (Savings bank accounts, fixed deposits, recurring deposit accounts) up to Rs 50,000 is exempted from income tax. This threshold may be increased to Rs 75,000 / Rs 1 lakh which still will have much lower fiscal cost,” writes Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.
SBI Research also suggested that the Government should increase the maximum age limit for subscription to Sukanya Samriddhi Yojana (SSY) to 12 years as a one-time measure to boost small saving deposits.
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Expected GDP growth
It is expected that the Government will continue to rely on small saving schemes to finance fiscal deficit in FY24. Meanwhile, SBI Research has estimated that the real GDP growth in FY24 would be around 6.2%.
“For FY24, real GDP growth is likely to be around 6.2% and with deflator expected at 3.6%, nominal GDP would grow by 9.8% to Rs 300 lakh crore in FY24 budget,” it said.
The report further expects that the Government’s fiscal deficit in FY23 would be around Rs 17.5 lakh crore. However, higher nominal GDP growth estimates would keep the fiscal deficit at 6.4% of the GDP.
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The Government is also expected to increase expenditure by around 8% in FY24.
“In FY24, we assume the Government expenditure may increase around ~8% over FY23 estimates to Rs 46.0 lakh crore. Subsidy bill which increased significantly in FY23 is likely to be capped in FY24 to around Rs 3.8-4.0 lakh crore and capital expenditure is expected to grow by at least 12%,” the report said.