State-owned New India Assurance Company Ltd received a favourable order from the National Faceless Appeal Centre (NFAC), Delhi, under the Income Tax Department, resulting in the deletion of a ₹672.36 crore income tax demand for Assessment Year 2022-23. According to reports from CNBC TV18, the order was received by the company on February 27, 2026, providing significant relief to the state-owned insurer. The deletion effectively nullifies a major financial liability previously levied by the Income Tax Department and strengthens the company's financial standing. The resolution was formalized through Order No. ITBA/NFAC/S/250/2025-26/1086635918(1) issued under Section 250 of the Income Tax Act, 1961, with the company confirming that no violations or contraventions were committed or alleged in this matter.
This resolution comes after New India Assurance faced a substantial tax demand in September 2025. As reported by CNBC TV18, the company had received a ₹2,379.13 crore tax demand on September 30, 2025, including penalties, for alleged non-payment of tax on coinsurance premiums and reinsurance commissions. The original demand was issued by the Additional Commissioner of CGST & Central Excise, Palghar Commissionerate, on September 29, 2025.
The previous order had claimed that New India Assurance failed to discharge GST on premiums received from 'Leaders' in the co-insurance business and on commissions earned from ceded reinsurance premiums. According to the company's filing, the issues relate to non-payment of GST on premiums received as a follower in the coinsurance business and non-payment of GST on commissions earned on reinsurance premiums ceded to reinsurance companies. The company had pointed out that the issue pertains to industry-wide practices and believes it has a strong case to contest the demand.
Despite the positive tax resolution, New India Assurance shares ended at ₹147.30, down by ₹1.90, or 1.27% on the BSE on Friday. As reported by CNBC TV18, the company clarified that the issues raised in the original order relate to non-payment of GST on premiums received as a follower in the coinsurance business and non-payment of GST on commissions earned on reinsurance premiums ceded to reinsurance companies. The company added that the order does not affect its financial or operational activities, as it follows CBIC guidelines and relates to a sector-wide matter. The removal of the ₹672.36 crore tax demand significantly reduces a financial burden and potential outflow for the insurer, strengthening its balance sheet and improving profitability outlook for the period.
New India Assurance, founded in 1919, is India's largest non-life insurer and a government-promoted entity. As of February 27, 2026, the company has a market capitalization of ₹24,338 crore with a PE ratio of 20.3. The insurer maintains Assets Under Management (AUM) of ₹1,00,802 crore as of Q1 FY26 and holds a market share of 15.5% in Q1FY26. However, the company's contingent liabilities stood at ₹7,688 crore as of February 27, 2026, highlighting potential future financial obligations. The company competes alongside peers like ICICI Lombard General Insurance (market cap ₹95,339 crore, PE 35.47) and Star Health and Allied Insurance (market cap ₹27,691 crore, PE 62.44).
