Niva Bupa Health Insurance Company has received a Notice of Demand under Section 156 read with Section 143(3) of the Income Tax Act, 1961, for the assessment year 2022-23, amounting to Rs 16,71,21,120, according to a recent regulatory filing.
The tax demand has been raised following the disallowance of certain expenditures claimed by the company. The primary additions to the taxable income stem from the disallowance of specific marketing and advertisement expenses under Section 37(1) of the Income Tax Act.
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Additionally, the tax authorities have disallowed provisions related to claims incurred but not reported (IBNR) and claims incurred but not sufficiently reported (IBNER), further increasing the company’s tax liability.
Niva Bupa Health Insurance has expressed its intent to challenge the order, asserting that the notice is appealable. The company plans to exercise its right to appeal before the appropriate appellate authorities.
“The Notice of Demand is appealable, and the Company shall exercise its right to appeal before the Appellate Authorities,” Niva Bupa stated in its regulatory filing.
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The demand notice, received by the company on March 31, 2025, highlights the ongoing scrutiny faced by businesses regarding tax deductions and financial disclosures. Such cases often lead to prolonged legal proceedings, with companies seeking relief through various levels of the judiciary.
As the matter progresses, industry experts will closely monitor the case, considering its potential implications for the insurance sector. The outcome could set a precedent for the treatment of marketing expenses and claim provisions under tax laws. Niva Bupa’s next course of action will be crucial in determining the final resolution of the dispute.