Care Health Insurance - Receives ₹140.20 Crore Income Tax Demand

Expert Analysis:

• Care Health Insurance, a material subsidiary of Religare Enterprises Ltd, has received income tax demand orders totaling ₹140.20 crore (including interest) for AY 2023-24 and 2024-25 from the Income Tax Department.

• The company has disputed the tax computation, stating that the demand has been incorrectly calculated, and expects the liability to reduce to around ₹96 crore after rectification.

• The demand arises from disallowances related to provisions (IBNR/IBNER), outstanding claims, TDS compliance issues, and marketing expenses, indicating technical accounting and tax treatment differences.

• Care Health Insurance plans to file rectification applications and pursue appeals, backed by favourable judicial precedents in similar matters.