Introduction
Life Insurance Corporation of India (LIC), the largest insurance company in the country, has received two demand notices from the Income Tax authorities in Mumbai, amounting to Rs 3,529 crore. The notices pertain to the assessment years 2018-19 and 2019-20, and are based on the disallowance of certain expenses claimed by LIC.
LIC’s response
LIC has said that it will file an appeal against the orders before the Commissioner (Appeals), Mumbai, within the prescribed timelines. The corporation has also said that there is no material impact on its financials, operations or other activities due to the demand notices. LIC has maintained that it has complied with all the applicable provisions of the Income Tax Act and the rules made thereunder.
Market reaction
The news of the demand notices has not affected the share price of LIC much, as it traded 0.52% lower at Rs 829.65 per share at 9:32 am IST on Friday. Analysts have said that the demand notices are not a major concern for LIC, as it has a strong balance sheet and a large customer base. LIC is also preparing for its mega initial public offering (IPO) later this year, which is expected to be one of the biggest in India’s history.