Lic Refused To Pay Tax 75 Thousand Crores Said Will Not Use Its Funds For Tax Payment

Amar Ujala Bureau, New Delhi

Published by: Dev Kashyap
Updated Fri, 18 Feb 2022 01:59 AM IST

Summary

According to documents submitted to market regulator SEBI for the IPO, there are 63 pending cases involving direct and indirect taxes of Rs 74,894.6 crore on LIC. Of these, the insurance company owes Rs 72,762.3 crore in 37 direct tax cases and Rs 2,132.3 crore in 26 indirect tax cases, which are yet to be recovered.

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The country’s largest insurance company, which is preparing for an IPO (Initial Public Offering), owes about Rs 75,000 crore to the Income Tax Department. The special thing is that Life Insurance Corporation of India (LIC) does not want to use its funds to pay tax liabilities.

According to documents submitted to market regulator SEBI for the IPO, there are 63 pending cases involving direct and indirect taxes of Rs 74,894.6 crore on LIC. Of these, the insurance company owes Rs 72,762.3 crore in 37 direct tax cases and Rs 2,132.3 crore in 26 indirect tax cases, which are yet to be recovered.

In this way, the total tax dues of the Income Tax Department on the company is Rs 74,894.4 crore. This is the highest tax due on any single company in the country. In the document, LIC has bluntly stated that it will not pay the outstanding tax from its own funds as the judgments of the court in many cases are not correct. She will appeal against them even further.

Company has hidden earnings since 2005
The Income Tax Department says that most of these cases are in dispute because LIC has not disclosed its total earnings. Many of these cases are years old. The department says the insurance company has not disclosed its correct income in several assessment years since 2005.

Highest outstanding in these financial years

financial year tax arrears
2008–09 5,955
2009-10 5,808
2010-11 6,881
2011-12 6,269
2012-13 5,133

(Liability in Rs. Crore)

No provision of funds for liabilities

Experts say that if LIC loses the case, then it will have to pay the outstanding tax. He has not kept any separate fund for this. Total such cases are worth Rs 24,728.03 crore. The government insurance company is set to list in the stock market in March 2022. It is coming up with an IPO of around Rs 75,000 crore.

impact on investors

  • If the case is lost, the company may have to spend a large amount in the form of tax.
  • This can lead to a fall in the returns accruing to the shareholders of the company.
  • Its market share may also come down.
  • Expected to have an impact on future earnings as well
  • 26,122.95 crore cash with the company as of September, 2021.

Expansion

The country’s largest insurance company, which is preparing for an IPO (Initial Public Offering), owes about Rs 75,000 crore to the Income Tax Department. The special thing is that Life Insurance Corporation of India (LIC) does not want to use its funds to pay tax liabilities.

According to documents submitted to market regulator SEBI for the IPO, there are 63 pending cases involving direct and indirect taxes of Rs 74,894.6 crore on LIC. Of these, the insurance company owes Rs 72,762.3 crore in 37 direct tax cases and Rs 2,132.3 crore in 26 indirect tax cases, which are yet to be recovered.

In this way, the total tax dues of the Income Tax Department on the company is Rs 74,894.4 crore. This is the highest tax due on any single company in the country. In the document, LIC has bluntly stated that it will not pay the outstanding tax from its own funds as the judgments of the court in many cases are not correct. She will appeal against them even further.

Company has hidden earnings since 2005

The Income Tax Department says that most of these cases are in dispute because LIC has not disclosed its total earnings. Many of these cases are years old. The department says the insurance company has not disclosed its correct income in several assessment years since 2005.

Highest outstanding in these financial years

financial year tax arrears
2008–09 5,955
2009-10 5,808
2010-11 6,881
2011-12 6,269
2012-13 5,133

(Liability in Rs. Crore)

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