Bowing to the long standing demand of India Inc, Finance Minister Pranab Mukherjee has abolished the fringe benefit tax and commodity transaction tax.
However, Minimum Allocation Tax (MAT) on book profits has been increased from 10 percent to 15 percent, but with a provision of carrying forward the tax credit on MAT to 10 years from the current seven years.
According to Kamesh Goyal, CEO, Bajaj Allianz Life Insurance, the insurance industry had a lot of expectations like exemptions and benefits for insurance premiums or separate section in Section 80 C, so that it could have provided a boost for long term investments like life insurance. However, scrapping of the FBT, and an unchanged tax structure are in the right direction. So, budget 2009 is a mix of good and bad.
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