LIC Share Price in Focus as IT Dept Slaps ₹7,100 Crore Tax Demand Inclusive of Interest

The Life Insurance Corporation of India (LIC) has been issued a demand order by the Income Tax Department for the financial year 2021-22.  

This demand includes a substantial amount of income tax and interest, which LIC plans to appeal before the Commissioner of Income Tax (Appeals). 

Details of the Income Tax Demand 

On March 25, 2026, LIC received a communication from the Assessment Unit of the Income Tax Department.  

The demand order specifies an income tax liability of ₹61,46,71,18,015 along with an interest charge of ₹9,53,25,87,935. The total demand arises from several disallowances and additions made by the tax authorities. 

Reasons for the Tax Demand 

The demand order cites multiple reasons for the additional tax liability. These include the addition of interim bonuses, losses from the Jeevan Suraksha Fund, and negative reserves as income.  

Furthermore, there were disallowances of deductions under section 80M and interest on late deposit of TDS. 

Financial Impact on LIC 

While the financial impact of the demand is significant in terms of the tax and interest amounts, LIC has stated that there will be no material impact on its operations or other activities.  

The corporation is expected to address the demand through the appropriate legal channels. 

Read More: Govt Recovers ₹9,516 Crore in Taxes from Hidden Overseas Assets Over 3 Years! 

Next Steps for LIC 

LIC has indicated its intention to appeal the demand order before the Commissioner of Income Tax (Appeals).  

The outcome of this appeal will determine the final tax liability of the corporation for the specified financial year. 

LIC Share Price Performance 

As of March 25, 2026, at 3:30 PM, LIC share price on NSE was closed at ₹781.10 up by 2.95% from the previous closing price. 

Conclusion 

The issuance of the income tax demand order to LIC highlights the ongoing scrutiny of large corporations by tax authorities. While LIC plans to contest the demand, the case underscores the complexities involved in corporate taxation. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.