Banks want current tax benefits extended to three-year deposits

Non-banking finance firms sought an exemption from the requirement to deduct tax at source (TDS) for interest payments

Banks have sought an extension of the current tax benefits on five-year deposits to three-year ones to attract medium-term liabilities and bring parity with concession for investment into mutual funds and bonds. In their wish list for the 2019-20 Budget, the banks voiced demands to enhance tax sops for amounts set for stressed assets.
 
Term deposits of five years or more with a scheduled bank are eligible for inclusion in gross qualifying amount for deduction under Section 80C of the Income Tax Act.  For other eligible investments, such as bonds and mutual funds, the lock-in period is three years,