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Budget '05-06 Views of Shikha Sharma,
CEO & Manging Director, ICICI Pru Life Insurance
Date: 01/03/05
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.
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