LIC stock slips as company faces income tax demand notices of Rs 3,528.75 crore

LIC, the state-owned insurer, experienced a one percent decline in its shares during early trade on January 12 following the receipt of two income tax demand notices totaling Rs 3,528.75 crore from the authorities in Mumbai. Additionally, on January 2, LIC received a GST notice amounting to Rs 806.3 crore.

The demand orders from the Income Tax Department are related to the assessment years 2012-13, 2013-14, 2014-15, 2016-17, 2017-18, 2018-19, and 2019-20. These orders were issued after the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to scrutinize LIC's utilization of surplus linked to an interim bonus mentioned in the assessment order. Upon reconsideration, the assessing officer disallowed the interim bonus, resulting in a tax effect of Rs 2,133.67 crore. Additionally, a demand notice of Rs 1,395.08 crore for the assessment year 2015-16 has been issued.

LIC has announced its intention to appeal these orders before the Commissioner (Appeals), Mumbai. However, the corporation has assured that there is no material impact on its financials, operations, or other activities.

Furthermore, on January 2, LIC received a GST notice of Rs 806.3 crore from the Maharashtra deputy commissioner of state tax, citing compliance-related shortcomings in FY 2017-18. This notice includes Rs 365.02 crore of GST dues, Rs 404.7 crore of penalty, and an interest payment of Rs 36.5 crore.

It's important to note that despite these developments, LIC has affirmed that there is no significant impact on its overall business operations or financial standing. Investors are advised to consult certified experts before making any investment decisions.

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