According to reports from CNBC TV18, HDFC Life Insurance received an income tax order on March 23 from the Assistant Commissioner of Income Tax, Central Circle 6 (2), Mumbai. The notice pertains to the FY 22-23 period (assessment year 2023-24) and requires the company to pay ₹126.46 crore in tax along with ₹45.55 crore in interest. The order cites irregularities and violations related to the company's classification of shareholders' net investment income as 'Income from life insurance business' instead of 'Income from other sources'. As per CNBC TV18, no penalties were levied in this assessment order.
As reported by CNBC TV18, the tax demand stems from several specific allegations against the company. The company is accused of classifying shareholders' net investment income as 'Income from life insurance business' instead of 'Income from other sources' - certain incomes that should not be claimed as exempt under Section 10. Additionally, the company claimed contributions from shareholders incorrectly as a deduction while computing shareholders' profits, and failed to make proportionate disallowance as per Section 14A, read with Rule 8D. The company also incorrectly considered certain marketing and advertising expenses in financials as admissible expenses while calculating the taxable surplus in the policyholder's account. According to CNBC TV18, the order alleges misclassification of shareholders' net investment income, incorrect exemption claims, improper deduction of shareholder contributions, and inadmissible marketing expenses in the policyholder account.
According to CNBC TV18, shares of HDFC Life Insurance closed at ₹603.50 apiece, up 1.93% for the day following the announcement. The company has stated that the tax notice will not have any adverse impact on the financial operations and shall be contested by way of appeal before the Appellate Authority. This marks the second recent tax-related notice for the company, as it received a GST order earlier this month for ₹104 crore tax demand and ₹94 crore interest for the FY19-20 period from the Assistant Commissioner of State Tax (INV-6), Investigation-A, Mumbai. Both companies made the disclosures in compliance with Securities and Exchange Board of India (SEBI) listing regulations, and said they do not expect the orders to materially affect ongoing business operations.
As reported by Upstox, on a consolidated basis, the company reported a marginal fall of 0.74% in net profit at ₹418.19 crore for the third quarter ended December 31, 2025, compared to ₹421.31 crore for the same quarter in the previous year. However, net premium income increased by 9.03% at ₹18,351.42 crore for Q3FY26 compared to ₹16,831.84 crore for the corresponding quarter previous year. On a year-to-date and yearly basis, the shares have delivered -19.5% and -17% respectively.
