The Income Tax (IT) department issued a tax demand order of ₹328.42 crore to private insurer ICICI Prudential Life Insurance Company Limited on Friday. The total demand includes ₹265.49 crore in tax and ₹62.92 crore in interest.
The demand order was issued by the Assistant Commissioner of Income Tax, Maharashtra, for ₹328.42 crore in tax, interest, and penalties for the assessment year 2023-24, citing multiple tax-related issues.
ICICI Prudential Life plans to appeal the income tax demand, disputing the tax treatment on various grounds. The company intends to challenge the order before the Commissioner (Appeals), referencing previous rulings in its favor.
The tax authorities identified several violations, including treating transfers from the shareholders' account to the policyholders' account as taxable income while also categorizing shareholders’ income under "income from other sources."
Additionally, the IT department disallowed multiple exemptions, including certain marketing and advertising expenses, while calculating the taxable surplus in the policyholders’ account.
ICICI Prudential Life stated that the key issues raised in the assessment order have been previously addressed in rulings by courts, the Income Tax Appellate Tribunal, Mumbai, and the Commissioner of Income Tax (Appeals) in its own cases from earlier years.
