Investment in mutual funds has increased rapidly in the last few years . Small and big investors are investing in mutual funds through SIP. This has had a bad effect on fixed deposits i.e. FD. The number of people making FDs has decreased rapidly. This has increased the liquidity problem in front of banks. To overcome this problem, former RBI Governor Shaktikanta Das had suggested banks to increase deposits by bringing a new product. Now the news is coming that many announcements can be made in the budget to attract FD. This includes income tax exemption on investment in FD for 3 years instead of 5 years, tax exemption on income from FD etc. Experts associated with the banking and finance sector have also given many suggestions to the Finance Minister regarding FD. The budget for the financial year 2025-26 is to be presented in Parliament on February 1.

Banks will get help in increasing savings 

Financial institutions, especially banks, have suggested tax incentives for fixed deposits in the upcoming budget to promote savings. This suggestion was made in a meeting with Finance Minister Nirmala Sitharaman before the budget amid a decline in savings in recent times. Radhika Gupta, Managing Director and CEO of Edelweiss Mutual Fund, said that during the pre-budget meeting with the Finance Minister, suggestions were also made to improve the efficiency of the capital market and increase capital market inclusion. He said that recommendations were also made to encourage long-term savings i.e. both bonds and equity shares. Finance Minister Sitharaman held a meeting with representatives of the financial and capital markets in connection with the preparations for the budget. This was the seventh meeting in this series. The meeting was attended by the Finance Secretary and DIPAM (Department of Investment and Public Asset Management) Secretary, Department of Economic Affairs and Financial Services Secretary and Chief Economic Advisor. 

This announcement is also possible in the budget 

A specific fund for MSMEs, small borrowers and eco-friendly initiatives like electric vehicles can be provided to organisations like SIDBI and NABARD. This should work in the same way as the National Housing Bank is doing in the case of housing finance companies. The limit under the SARFAESI Act is Rs 20 lakh. This can be reduced so that small NBFCs can come under its purview. According to sources, bank representatives suggested linking long-term capital gains tax with fixed deposits to encourage deposits. Income tax is levied on returns from fixed deposits. This discourages people from investing their savings in fixed deposits.