Govt collects Rs 27k cr in taxes from sr citizens

April 16, 2024 00:44

The government has likely mopped up over Rs 27,000 crore in taxes from senior citizens on the interest they earned on term deposits last fiscal, researchers at the country's largest lender SBI said.

According to the report by SBI researchers, the total amount of deposits has risen by 143 per cent in the last five years to Rs 34 lakh crore at the end of FY24 from Rs 14 lakh crore.

High-interest rates also seem to have led to higher interest among the senior citizens to invest in fixed deposits, as the total number of term deposit accounts grew 81 per cent to 7.4 crore in the same time period, the report said.

SBI researchers estimated that at least 7.3 crore of these accounts have a balance of over Rs 15 lakh, and assuming that the deposits fetch an interest of 7.5 percent, senior citizens have earned Rs 2.7 lakh crore in FY24 as interest alone.

This includes Rs 2.57 lakh crore from the bank deposits and the remaining from the Senior Citizen Saving Scheme, the report said.

"By assuming 10 percent (average) tax paid by the senior citizens harmonised across cohorts, the tax mop-up by government of India would come around Rs 27,106 crore," the report said.

Senior citizens' share in the incremental term deposits has gone up to 30 percent now from 15 percent five years earlier, it said. -- PTI

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