Quick Summary
The Income Tax Department is set to send demand notices totaling Rs 25,000 crore to several insurance companies by the end of March. According to a senior government official, this move comes as part of a reassessment of taxes paid by these companies for the period before April 1, 2023. The dispute revolves around commissions paid to agents and intermediaries by insurance companies, which allegedly exceed the limits set by the Insurance Regulatory and Development Authority of India (IRDAI). T
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FAQ :
The department is issuing notices due to alleged tax evasion related to commissions paid to agents and intermediaries before April 1, 2023, which are suspected to have been disguised as other expenses.
The total value of the demand notices being issued amounts to approximately £25,000 crore.
The dispute centres on whether commissions paid to agents and intermediaries exceeded the limits set by the IRDAI and if these were legitimate expenses eligible for tax deductions.
The CBDT plans to disallow these expenses, make tax adjustments, and may initiate penalty proceedings.
Yes, in a separate but related investigation, major insurers like Bajaj Allianz, Aditya Birla Sun Life Insurance, and HDFC Life Insurance have received notices from the DGGI for suspected GST evasion.
The IRDAI lifted the capping limits on commissions from April 1, 2023.
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