LIC Faces Substantial Tax Demand from Income Tax Department for FY22
Synopsis
LIC encounters a hefty tax demand for FY22, totaling over Rs 61 billion. The insurer plans to appeal the decision, asserting it won't impact operations significantly. Discover the details behind this financial development and its implications.
Key Takeaways
LIC received a tax demand of over Rs 61 billion.
The company plans to appeal the decision legally.
The tax demand is based on several adjustments by the tax authorities.
LIC assures that operations will not be materially affected by this order.
Market response to the news was positive, with share prices increasing.
New Delhi, March 25 (NationPress) The Life Insurance Corporation of India (LIC) announced on Wednesday that it has received a significant tax demand from the Income Tax Department concerning the financial year 2021–22.
In a regulatory filing, LIC reported that the Assessment Unit of the tax department has issued a demand of Rs 61,46,71,18,015 as income tax, alongside an additional interest charge of Rs 9,53,25,87,935.
The insurer indicated its intention to contest this order, planning to file an appeal with the Commissioner of Income Tax (Appeals) utilizing the available legal avenues.
This tax demand has emerged from various adjustments made by the tax authorities during their assessment.
Key issues include the classification of interim bonuses as income, the inclusion of losses from the Jeevan Suraksha Fund as income, and the classification of negative reserves as income.
The department has also denied certain deductions claimed by LIC under Section 80M, as well as interest expenses related to delays in the payment of tax deducted at source (TDS).
Despite the substantial figures involved, LIC affirmed that the order will not materially affect its overall operations or business activities.
It stated that the financial implications are confined to the demanded tax and interest amounts.
This disclosure was made in accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates that listed companies inform stock exchanges about significant developments.
LIC also confirmed that this information has been communicated to stock exchanges and is available on its official website.
Following this announcement, LIC’s shares experienced an uptick in the market. On the NSE, the stock closed at Rs 779.60, reflecting an increase of Rs 20.90 or 2.75 percent, while another closing price indicated it at Rs 781.10, up by Rs 22.40 or 2.95 percent.
Point of View
The recent tax demand faced by LIC highlights the complexities involved in financial assessments. While the sum is substantial, the corporation's assurance regarding its operational stability offers a level of confidence to stakeholders.
NationPress
20 Jun 2026
Frequently Asked Questions
What is the amount of tax demand issued to LIC?
The Income Tax Department has issued a demand of Rs 61,46,71,18,015 along with an additional interest of Rs 9,53,25,87,935.
How will LIC respond to the tax demand?
LIC plans to challenge the tax demand by filing an appeal with the Commissioner of Income Tax (Appeals).
Will this tax demand impact LIC's operations?
LIC has stated that the tax demand will not have any material impact on its overall operations or business activities.
What reasons did the tax authorities provide for the demand?
The demand arose from adjustments such as treating interim bonuses as income and disallowing certain deductions under Section 80M.
How did the market react to this news?
Following the announcement, LIC's shares closed higher on the market, indicating a positive reaction from investors.
