Care Health Insurance Faces Rs 104.7 Crore Tax Bill from Income Tax Dept

India's largest health insurer, Care Health Insurance, is in hot water with the Income Tax Department imposing a tax demand of Rs 104.7 crore upon it. The move was preceded by a close examination of the company's books for the last fiscal year when some tax problems had been in the limelight.

Income Tax Department notice states that Care Health Insurance wrongly withheld some amount not under tax laws and rules. Discrepancies in the accounting process of the firm have also led to a shifting of the firm's tax liability, claims the department. The quantum of Rs 104.7 crore is the revised amount, which the tax department says the firm should pay tax, penalty, and interest on the assessment year under consideration.

This has led Care Health Insurance to issue a notice that it would contest the claim. The company informs that it has never breached any of the tax laws and is now considering the terms of the notice. It is to respond suitably and, as may be necessary, approach the court of law for judgment of the case.

This is the latest in a broader pattern throughout India's insurance industry of widening surveillance, with monitoring agencies backtracking on surveillance of financial and tax activity. The ruling on Care Health's appeal would be of decisive importance to the industry as a whole.