New Delhi: Banks and Financial Institutions (FIs) on Tuesday asked the finance minister Arun Jaitley to dilute the government ownership in public sector banks up to 51 per cent. They recommended that tax benefits which incur to people for taking a health insurance be hiked.
It was also recommended that tax exemption available for investments to the people under Section 80C of the Income Tax Act be raised. Under this section, people can claim tax benefits for investments upto Rs 1 lakh which include five years fixed deposits in banks and insurance among others.
“In order to increase savings, there were suggestions to raise the tax exemption limit to Rs 2 lakh from Rs 1lakh and increase the mediclaim tax exemption limit to Rs 50,000 per year from Rs 15,000,” said sources.
Mr Jaitley held pre-budget consultation with the representatives from banking, financial institutions and economists on Tuesday. Some banks recommended to double the minimum threshold for tax deducted at source for interest earned on fixed deposits to Rs 20,000 from current Rs 10,000 to boost savings.
Kotak Mahindra Bank managing director Uday Kotak said the government should consider listing Life Insurance Corporation of India (LIC). “Over the next few years the government should seriously consider listing of LIC. The kind of money government can raise by listing LIC is significant. It can fund...Needs of public sector banks as well as the fiscal deficit,” he said.
