ICICI Prudential Life Insurance Company Limited has announced its intention to challenge an income tax order demanding ₹328.42 crore, which includes tax, interest, and penalties, for the Assessment Year 2023-24. The order was issued by the Assistant Commissioner of Income Tax in Maharashtra and received on March 28, 2025.
The tax assessment highlights several key points of contention, including:
- Classifying the transfer from shareholders’ accounts to policyholders’ accounts as taxable income.
- Denying exemptions under Section 10 of the Income Tax Act for certain types of income.
- Implementing disallowances under Section 14A in conjunction with Rule 8D for exempt income.
- Taxing shareholders’ income as income from other sources.
- Rejecting specific marketing and advertising costs when computing the taxable surplus in the policyholders’ account.
The total demand consists of ₹265.49 crore for tax and ₹62.92 crore for interest, but no penalties have been applied. ICICI Prudential Life plans to file an appeal with the Commissioner (Appeals) within the required timeframe.
The company has stated that the primary issues cited in the assessment order have been previously resolved in rulings by various courts, the Income Tax Appellate Tribunal in Mumbai, and the Commissioner of Income Tax (Appeals) in past cases.