Retail depositors earning   negative returns; relook taxation on interest: SBI economists

Country’s largest lender SBI has said that there is need for reviewing taxes on interests earned and if it not for all depositors, the taxation review should be carried out for at least deposits made by senior citizens who depend on the interest for their daily needs because retail depositors are earning negative returns on their bank deposits.

The RBI can also relook at the regulation that does not allow interest rates of banks to be determined as per age-wise demographics.

At present, generally banks deduct tax interest income of over 40,000 for all the depositors while for senior citizens the taxes set in if the income exceeds Rs 50,000 per year.

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