As we are all aware of declining interest rate scenario in the country from the past few years. There is no hope that interest rates would go-up in the near future.
Considering this situation, India’s leading Bank SBI Financial experts team concluded that their “Customers are getting returns below the inflation rate! At least Government should re-examine the tax applicability of the deposits”
As the FD Returns are far below than the general rise in purchasing power, People are refusing to do Fixed Deposits, rather they are looking at the alternatives like stock market; as the stock market is in bull run and giving stellar returns when compared to bank FD’s.
Besides this, TDS(Tax Deducted at Source)applicability on the interest earned above 40,000 rupees for general public and 50,000 rupees for senior citizens is hurting the sentiment prevailing on FD’s.
So SBI wishes the government to reduce interest rate burden to at least senior citizens, as they depend entirely on the interest income which is far below the inflation rate in India.
According to SBI To prevent the inflows to equity market, government should reconsider TDS applicability terms and conditions as the customers are getting negative returns when compared to general price increase in goods and service.
Even Though there is no liquidity crunch in the economy, SBI team recommends the government to alter the fixed deposits terms and conditions.