Quick Summary
A seismic scandal has rocked the insurance industry as an internal income tax department assessment reveals a staggering evasion of nearly ₹30,000 crore in income tax since the inception of the Goods and Services Tax (GST) on July 1, 2017. The alleged wrongdoing centers on insurance companies and their intermediaries who are accused of suppressing income and fabricating expenditures. According to sources within the income tax department, tax demand notices are currently being prepared and wil
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FAQ :
The internal assessment reveals nearly ₹30,000 crore in income tax evasion since July 1, 2017. This amount is expected to rise with the addition of interest and penalties.
The primary allegations include suppressing income, fabricating expenditures such as fake CSR activities and inflated advertising bills, and improper commission payments to agents and intermediaries.
Banks acting as insurance intermediaries were found to have had their manpower supply costs covertly covered by insurance companies, which were not reflected in the banks' financial records, violating income tax laws.
An estimated ₹3,500 crore in GST evasion has been identified, stemming from intermediaries providing counterfeit invoices for claimed input tax credit.
The income tax department is preparing to dispatch tax demand notices, including penalties and interest, to the involved entities. Companies will have time to respond or contest these demands.
The investigation was launched by the income tax department last year in collaboration with the Directorate General of GST Intelligence (DGGI).
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