LIC Faces Substantial Income Tax Demand for FY22
Synopsis
LIC has received a hefty tax demand for FY22 from the Income Tax Department, amounting to over Rs 61 billion. Despite the significant sum, the company assures that operations will remain unaffected as it plans to appeal the demand.
Key Takeaways
LIC has received a tax demand of over Rs 61 billion for FY22.
The company plans to appeal the decision legally.
LIC assures that its operations will not be materially affected.
Market response has been positive, with stock gains reported.
Adjustments made by tax authorities are the basis for the demand.
New Delhi, March 25 (NationPress) The Life Insurance Corporation of India (LIC) announced on Wednesday that it has received a substantial income tax demand from the Income Tax Department concerning the financial year 2021–22.
According to a regulatory disclosure, the Assessment Unit of the tax department has issued a demand totaling Rs 61,46,71,18,015 as income tax, in addition to a supplementary interest amount of Rs 9,53,25,87,935.
The insurance company indicated its intention to contest this demand and will initiate an appeal to the Commissioner of Income Tax (Appeals) using the available legal channels.
This tax demand has emerged as a result of various adjustments made by tax authorities during the assessment process.
These adjustments include categorizing interim bonuses as income, including losses from the Jeevan Suraksha Fund as income, and treating negative reserves as income.
The tax department has also rejected certain deductions that LIC claimed under Section 80M, as well as interest expenses related to delays in the remittance of tax deducted at source (TDS).
Despite the significant sum involved, LIC has stated that this order will not materially affect its overall business operations or activities.
The financial repercussions, as indicated, are confined to the tax and interest amounts specified in the demand.
This disclosure complies with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates listed companies to notify stock exchanges of significant events.
LIC further confirmed that this information has been communicated to stock exchanges and is available on its official website.
In light of this news, LIC’s stock experienced an uptick in the market. On the NSE, shares closed at Rs 779.60, rising by Rs 20.90 or 2.75%, while another closing price recorded it at Rs 781.10, an increase of Rs 22.40 or 2.95%.
Point of View
It’s crucial to highlight that while the income tax demand against LIC is substantial, the corporation asserts that its operational integrity will remain intact. This scenario reflects the ongoing complexities within tax regulations that can impact even major financial institutions.
NationPress
10 May 2026
Frequently Asked Questions
What is the total tax demand amount against LIC?
The total tax demand against LIC is Rs 61,46,71,18,015, with an additional interest amount of Rs 9,53,25,87,935.
How does LIC plan to respond to the tax demand?
LIC plans to appeal the tax demand before the Commissioner of Income Tax (Appeals) and contest the order through legal channels.
Will this tax demand affect LIC's business operations?
LIC stated that the demand will not have any material impact on its overall operations or business activities.
What adjustments led to the tax demand?
The tax demand arose from adjustments such as treating interim bonuses and negative reserves as income, along with disallowed deductions.
How did the market react to this news?
Following the announcement, LIC's shares saw an increase, closing higher on the market.
