LIC Faces ₹7,100 Crore Income Tax Demand, Yet Shares Jump

• LIC receives a tax notice for ₹6,146 crore in tax and ₹953 crore in interest for FY 2021-22, totaling ₹7,099.97 crore.
• The company disagrees with the demand, stating it relates to adjustments during tax assessment, and plans to challenge it legally.
• Reasons for the demand include treating interim bonuses as income, adding Jeevan Suraksha Fund losses to income, and disallowing certain deductions.
• LIC will file an appeal before the Commissioner of Income Tax Appeals, asserting it's a normal process and will strongly present its case.
• Despite the large demand, LIC states it will not significantly impact daily operations, business, or policyholders, only affecting tax and interest amounts. Shares jumped 2.75% to 2.95% on the news.

Key Questions Answered

Why did LIC's shares jump despite a ₹7,000 crore income tax notice?

LIC's shares jumped because the company reported strong Q3 earnings.

What specific adjustments led to LIC's massive ₹7,000 crore tax demand?

LIC faces a ₹7,000 crore tax demand due to disallowances and additions by the tax authority. This includes disallowed deductions under Section 80M and interest related to late TDS deposits.

How will LIC legally challenge the Income Tax Department's ₹7,000 crore notice?

LIC will legally challenge the Income Tax Department's ₹7,000 crore notice by filing an appeal before the Commissioner of Income Tax (Appeals).