Life Insurance Corporation gets Rs 11,500 crore in income tax refunds, policy holders to benefit

Life Insurance Corporation (LIC) has received more than Rs 11,500 crore in income tax refunds and a big chunk of the amount would be passed on to policyholders, an official said.

"We received I-T refunds in two tranches aggregating to more than Rs 11,500 crore, after winning a dispute with the I-T department at the Income Tax Appellate Tribunal (ITAT)," an LIC official, who wished not to be named, told PTI here today, adding that this refund happens to be the largest which the company has received so far.

This could not be ascertained with LIC Chairman S K Roy. A text message sent to him also remained unanswered.

In its order dated April 3, 2013, ITAT Mumbai had delivered a judgement in favour of LIC with respect to assessment years 2007-08, 2008-09 and 2009-10, the official said.

As a result of the above ITAT judgement, the LIC received a refund of Rs 4,190.19 crore for assessment years (AY) 2007-08 and 2009-10 on December 31, 2013. A refund for AY 2008-09 worth Rs 7,500 crore has been received by the LIC recently, the official said.

As per Section 26 of the LIC Act of 1956, 95 per cent of the surplus coming from I-T refunds ought to go to its policyholders, while the remaining 5 per cent has to be paid to the government in the form of dividend, after arriving at actuarial valuation at the close of the current fiscal year, the LIC official said.

LIC has paid advance income tax for the financial year 2013-14 (AY2014-15) to the tune of Rs 5,118.92 crore, as against Rs 4,323.99 crore in 2012-13 (AY2013-14).

LIC's service tax obligations for FY14 was Rs 4,022.40 crore (provisional) as against Rs 3,682.58 crore in FY13, he said. (PTI - Economic Times)