Life Insurance - Budget '05-06 Views of Shikha Sharma,
CEO & Manging Director, ICICI Pru Life Insurance
03-Mar-2005
fjrigjwwe9r3SDArtiMast:ArtiCont
fiogf49gjkf0d
What is your opinion about Budget 2005-06?
Union Budget 2005-06 maintains the thrust of the current government on aiding rural and infrastructure development, providing incentives for sectors with job creation potential and directing savings towards investment. Importantly, there are significant positive developments on the taxation front, both in terms of simplification as well as reduction in the tax rates, both direct as well as indirect.
The significant outlays for rural road development, irrigation and rural electrification are long-term positives, which will go a long way in building a solid backbone for sustainable growth and reduction in poverty. Given the huge dependence of the country on agriculture, no growth is sustainable without fundamental improvement in the rural infrastructure landscape.
A notable feature of the budget is material reduction in overall rates of taxes and duties. The peak customs duties are brought down in many sectors. The reduction in the corporate tax rate is a big positive surprise.
What benefits/implications has it brought for the insurance sector?
The budget has expanded the number of people who can avail of tax benefits on their savings by introducing section 80C, which allows one to reduce the taxable income up to Rs 100,000 by saving through specific instruments such as life insurance. Because this is applicable for people across income brackets, many more people can avail of the benefits. Further, the Rs 1 lakh limit is significantly higher than the earlier Rs 80,000 limit u/s 88.