New India Assurance gets a ₹124.98 crore demand notice from Income Tax department

“…we would like to inform you that the company has received an order from the National Faceless Assessment Centre, Income Tax Department, levying a penalty of ₹1,24,98,58,050/- under section 271(1)(c) of the Income Tax Act, 1961 ('Act') for, inter alia, disallowance of payment made to auto dealers u/s 37 of the Act for AY 2016-17,” the PSU general insurer firm said in a statement to the exchanges.

The amount would be shown as a contingent liability in the financial statements of the company, it said.

Based on the merits of the matter, the company would pursue an appeal before the National Faceless Appeal Centre (NFAC) or other legal options against the order, it said.

The company informed us about the tax notice after the market hours. Shares of New India Assurance Company closed at ₹153 apiece on Thursday, edging higher by 0.09%.

According to National Stock Exchange data, its market capitalisation stands at ₹25,214.40 crore. The company shares had touched their 52-week low of ₹135.60 per share on March 3, 2025.

Over the last five trading sessions, the company shares have gained almost 6%, while year-to-date, the scrip has tanked 26%.

New India Assurance Company has consistently maintained its position as a market leader and has been making profits regularly. The company had recorded a nearly 51% drop in net profit to ₹353 crore for the third quarter of the current financial year.

Meanwhile, for the December quarter, the Public Sector General Insurance Companies (PSGICs) have achieved a financial turnaround in the December quarter, posting a combined profit of ₹1,066 crore on the back of various reforms by the finance ministry.

Public sector general insurance companies (PSGICs), which historically reported losses, witnessed a major turnaround, with all of them becoming profitable in the last quarter.