MUMBAI: The
Life Insurance Corporation of India
has informed stock exchanges that it has received a refund order for Rs 25,464 crore, but faces three income tax demand orders which could result in an outgo of Rs 2,765 crore, which it will contest with the
IT commissioner
.
The refund will come as a boost for policyholders and shareholders. The refund order comprises principal amount and interest. While the principal tax amount is currently reckoned as a receivable in the corporation's books and will not impact the balance sheet or the current year's financials, the interest component, which is more than half of the amount given the age of the case, will be distributed to policyholders and shareholders in the ratio 92.5:7.5.
"There is no material impact on financials, operations or other activities of the Corporation due to the above mentioned orders,
LIC
said in its exchange disclosure.
From 2013 to 2020, the IT Department allowed a refund of Rs. 25,464 crore following an order by the tax tribunal. This refund follows a review by the tax assessment officer who disallowed the interim bonus. This resulted in a tax demand of Rs 2,133.67 crore which reduces the original refund amount of Rs 27,597 to Rs 25,464 crore.
In another case for FY16, the officer disallowed the interim bonus, and placed Rs. 1,395.08 crore demand. In FY 2011-12, there's a third demand for Rs. 1,370.60 crore because the interim bonus was disallowed.
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