LIC IPO: LIC IPO will come soon, documents submitted to SEBI

75 thousand crore tax dues on LIC, what will be the effect on IPO if not paid?


new Delhi. On the one hand, the government is busy in completing the preparations for launching LIC’s IPO, while on the other hand there is a dispute over the recovery of big tax from this insurance company. In the draft paper submitted by LIC, it has been found that the government has given tax liability of about 75 thousand crores on the company.

According to the draft paper, 63 big cases of direct and indirect tax are going on in LIC. In this, there are 37 cases of direct tax only, from which Rs 72,762.3 crore has to be recovered. 2,132.3 crore to be recovered from 26 cases of indirect tax. In this way, a total tax arrears of Rs 74,894.5 crore are coming out on the company. This is the highest tax due on any single company in the country.

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Company does not want to give its money to pay tax
LIC has clearly stated in its draft paper that it will not use its funds to pay tax liabilities. The company says that in many cases the decisions made by the court are not correct and it will appeal against them even further. 24,728.03 crores are also involved in these cases.

Income Tax Department’s allegation – LIC hid its earnings
Regarding the ongoing income tax cases against LIC, the Income Tax Department says that most of these cases are being disputed because the company has done the work of hiding its total income. The department says that many of these cases are years old. The company did not disclose its income correctly many times after 2005, due to which controversies arose.

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What will be the effect on investors
If LIC loses its case in these cases and has to pay a hefty fund in the form of tax, then the returns received by the public shareholders of the company may also decline. Not only this, the market share of LIC may also come down, which will affect its earnings in future. The company had cash of 26,122.95 crores as of September, 2021.

Tags: income tax, LIC IPO, Life Insurance Corporation of India (LIC)


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