Life Insurance Corporation of India (LIC) disclosed receiving a substantial tax demand from the Income Tax Department for the financial year 2021–22. The tax department’s Assessment Unit has issued a demand totaling Rs 61,46,71,18,015 as income tax, along with an additional interest amount of Rs 9,53,25,87,935. LIC intends to challenge this order by filing an appeal before the Commissioner of Income Tax (Appeals) through the available legal process.
The tax demand stems from various adjustments made by the tax authorities during the assessment. These adjustments involve treating interim bonuses as income, considering losses from the Jeevan Suraksha Fund as income, and categorizing negative reserves as income. Additionally, the tax department has disallowed certain deductions claimed by LIC under Section 80M and interest expenses related to delays in depositing tax deducted at source (TDS).
Despite the significant amount involved, LIC has stated that the order’s impact on its overall operations or business activities will be immaterial. The financial implications are confined to the tax and interest amounts specified in the demand. The disclosure was made in accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandating listed companies to inform stock exchanges about significant developments.
LIC has confirmed sharing this information with stock exchanges and posting it on its official website. Following this announcement, LIC’s shares closed higher in the market. On the NSE, the stock concluded at Rs 779.60, marking an increase of Rs 20.90 or 2.75 percent, while another closing price showed it at Rs 781.10, up Rs 22.40 or 2.95 percent.
