MUMBAI - Shares of Life Insurance Corporation of India (LIC) opened lower today and continued to trade down following the announcement of a significant tax demand. Income tax officials in Mumbai have levied a demand of Rs 3,528.75 crore ($1 = ₹82.80) on the insurer. This demand comes in the wake of a reassessment directed by the Income Tax Appellate Tribunal (ITAT), which also resulted in a refund intimation of Rs 25,464 crore for LIC.
The refund includes a principal amount of Rs 11,000 crore and an interest component of Rs 14,000 crore. Despite the tax demands, which involve Rs 2,765 crore related to disallowed interim bonuses for certain assessment years, LIC is preparing to challenge the decision. The company intends to file an appeal with the Commissioner (Appeals) in Mumbai.
LIC has reassured investors and policyholders that the financial demands are not anticipated to have a material impact on the company's financial health or its operations. The principal amount of the refund has already been incorporated into the company's books, and no adverse effects on the balance sheet are expected. Furthermore, the interest from the refund is set to be distributed between policyholders and shareholders, with policyholders receiving the majority share.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.