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 of 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 contest this demand by appealing before the Commissioner of Income Tax (Appeals) through the available legal channels.
The tax demand stems from various adjustments made by the tax authorities during the assessment process. These adjustments include categorizing interim bonuses as income, treating losses from the Jeevan Suraksha Fund as income, and considering negative reserves as income. Additionally, the tax department has disallowed certain deductions claimed by LIC under Section 80M, along with interest expenses related to delays in depositing tax deducted at source (TDS).
Despite the significant amount involved, LIC has emphasized that the tax order will not significantly impact its overall operations or business activities. The financial implications are confined to the mentioned tax and interest amounts in the demand. The disclosure was made in adherence to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates listed companies to inform stock exchanges about notable developments.
LIC has also confirmed that it has shared this information with stock exchanges and posted it on its official website. Subsequent to this announcement, LIC’s shares closed higher in the market, with the stock on the NSE finishing at Rs 779.60, marking a gain of Rs 20.90 or 2.75 percent, and another closing at Rs 781.10, up by Rs 22.40 or 2.95 percent.
