Punjab National Bank (PNB), the country’s second largest bank, has shocked account holders. The bank has decided to cut interest rates on savings accounts. The bank has decided to reduce interest rates on savings accounts from 2.90% to 2.80% per annum. The new rates will be effective from December 1.
From December 1, 2021, the interest rate on savings account balances of less than Rs 10 lakh will be 2.80% per annum. In addition, for Rs. 10 lakhs and above, the annual interest rate will be 2.85%. So far, an annual interest of 2.90 per cent is being paid on deposits.
Under Section 80TTA of the Income Tax Act, income up to Rs. 10,000 per annum from interest is exempt from tax in case of bank savings account. The benefit is available to persons below 60 years of age. The discount for senior citizens is Rs 50,000. If the income is more then TDS is deducted. If the interest income exceeds the prescribed rebate limit, 10% TDS is deducted by the bank.
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