Broad stability with minimal tax change

COMMENT/ Shikha Sharma, CEO & MD, ICICI Prudential Life

Enhancing social justice through a variety of social sector programmes, encouraging long-term savings and as a corollary, infrastructure and rural development, and maintaining fiscal discipline are commendable in the Budget.

Broad stability with minimal change in taxation has been on expected lines. It's the same with the increase in service tax, along with inclusion of more services under the net, given the government's vision to bring parity between manufacturing and services as far as indirect taxes are concerned.

Reduction in peak customs duty and rationalisation of excise duties was broadly what was expected. No change in personal and corporate income taxes is commendable.

Life insurance and pensions has an important role to play in mobilising long-term savings. These are driven by tax exemptions, and the finance minister has recognised this need. To this end, he has introduced two positive changes in the budget.

The first is the removal of the sub-limit of Rs 10,000 for tax-free contributions to pension policies, allowing individuals to save up to Rs 1 lakh towards such plans. The moves are sure to boost investor confidence and long-term savings which can be deployed towards the thrust area of infrastructure and rural development.