MONEY
SBI chief calls for tax parity on returns from bank deposits and equity investments
- IBJ Bureau
- Feb 01, 2026
State Bank of India (SBI) Chairman C S Setty has pitched for parity in tax treatment on returns made on equity investments and bank deposits.
Mr Setty has said that there is no disparity in taxation anywhere else in the world, and it is time for India also to align with other markets.
“I think, there should be a level playing field for the financial savings instruments,” he has said.
Provisions incentivising equity investments through easier taxation are probably justified at some point of time. But given where we are today, where interest in the riskier equity markets is rising, no such treatment may be required.
At present, returns on deposits attract taxation according to a taxpayer’s tax slab, which may go up to 30 per cent, while returns made on listed equities have lower or concessional rates with a 12.5 per cent taxation on long-term capital gains of over Rs 1.25 lakh and 15-20 per cent on short-term capital gains.
Bankers have been asking for parity between the two financial instruments for some time now, and the same have been intensified, especially after facing challenges on deposit accretions.
Many bankers say that savers have become smart and are only maintaining minimum balances in bank accounts by choosing to deploy excess money in equities for better returns. This reduces the resources for lending available with banks, and many times, they are forced to make excess investments in government bonds or also borrow from money markets to cater to credit demand.
Report By
View Reporter News