In a victory for Life Insurance Corporation (LIC), the Income Tax Department has issued a refund intimation of Rs 25,464.46 crore for seven assessment years.
LIC Life Insurance Corporation (Photo:IANS)
In a victory for Life Insurance Corporation (LIC), the Income Tax Department has issued a refund intimation of Rs 25,464.46 crore for seven assessment years.
The refund pertains to the ongoing dispute between the Income Tax Department and LIC over allowing interim bonus paid to policyholders by the corporation as deductible expenditure.
The aggregate Rs 25,464 crore refund pertains to AY 2012-13, 2013-14, 2014-15, 2016-17, 2017-18, 2018-19, and 2019-20, LIC said in a filing with stock exchanges.
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While LIC’s stand was that such interim bonus payouts came under permissible expenditure for taxation purposes, the assessing officer of the Income Tax Department had initially taken a view that it was taxable as surplus was being distributed as an interim bonus.
LIC had challenged the assessing officer’s decision in various appellate forums including ITAT, which directed the IT Department to re-examine the case.
On reconsideration, the assessing officer, while issuing the refund for seven assessment years, also made a separate demand order of Rs 2,133 crore for two other years.
So as against earlier expected refund of about Rs 27,500 crore for seven assessment years, LIC has now got refund of Rs 25,464 crore after adjusting Rs 2,133 crore, sources said.
LIC now plans to appeal to Commissioner, Appeals against all the demand orders – Rs 2,133.67 crore, Rs 1,395 crore, and Rs 1,370 crore – for various assessment years, according to LIC’s filings with the stock exchanges.
LIC also said there is no material impact on financials, operations or other activities of the corporation due to these demands orders.
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