Corporate Announcement
LIC Receives ₹710+ Cr Income Tax Demand Notice; No Material Operational Impact
NSE
LICI
BSE
543526
LIC receives a significant income tax demand for FY22 but clarifies no material impact on operations and plans to appeal.
PRICE-SENSITIVE TRIGGER
- Event: ₹710+ Cr Income Tax Demand Notice
- Type: Regulatory / Tax Issue
- Impact: ⚠️ Negative (Sentiment-driven)
- Immediate Effect: Short-term volatility; possible gap-down
Tax Demand (Income Tax):
₹614.67 Crores
Interest Component:
₹95.32 Crores
Total Exposure:
~₹710+ Crores
What Happened ?
Life Insurance Corporation of India (LIC) has received a communication/demand order from the Income Tax Department regarding income tax and interest for FY 2021–22.
The company stated that the order is appealable before the Commissioner of Income Tax (Appeals).
Reason for Demand
The demand arises due to disallowances on:
- Addition of Interim Bonus as income
- Addition of loss from Jeevan Suraksha Fund as income
- Addition of negative reserves as income
- Disallowance under Section 80M
- Disallowance of interest on late TDS deposit
These are primarily accounting/tax treatment differences, not operational issues.
Company Clarification
LIC has clearly stated:
- The demand is subject to appeal
- There is no material impact on operations
- Financial impact is limited to the tax demand amount (if upheld)
This reduces immediate investor concern
Strategic importance
- Highlights tax complexity in insurance accounting
- Reflects regulatory scrutiny on large financial institutions
- Important for long-term earnings and cash flow assessment
Source Document: Click Me