LIC receives Income Tax Penalty Notice of Rs. 84 Crore; Insurer to file Appeal against Order

One of India’s biggest insurance companies, LIC (Life Insurance Corporation of India) stated yesterday that it has received a penalty notice of Rs.84 Crore from the income tax department pertaining to three assessment years i.e. 2012-13, 2018-19 and 2019-20.

“Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that Corporation has received an order from the Income Tax Authority under section 271(1)(c) and 270A of the Income Tax Act, 1961 issued on 29th September 2023 which came to our knowledge on 03rd October, 2023,” it continued.

The tax authority imposed a penalty of Rs 12.61 crore for assessment year 2012-13, Rs 33.82 crore for 2018-19, and Rs 37.58 crore for assessment year 2019-20 amounting to over Rs 84 crore, according to LIC in a regulatory filing.

The insurer stated that they will file an appeal against the order with the appropriate appellate authority within the timeframes specified.

The penalties related to government-provided capital income that was not considered taxable income, as well as Section 80G deductions claimed while computing income under Section 44, read with rule 2 of the First Schedule to the Income Tax Act of 1961.

Separately, on September 27, ICICI Lombard was served with a show cause notice by the Directorate General of GST Intelligence (DGGI) for a tax demand of Rs 17,28,86,10,803 (over Rs 1,728 crore). The notice of cause related to “non-payment of GST on the co-insurance premium accepted as follower in case of coinsurance transactions and non-payment of GST on reinsurance commission accepted on the reinsurance premium ceded to various Indian and foreign reinsurance companies during the period July 2017 to March 2022″, according to the company in a filing.