LIC pays dividend of Rs1,635-crore to central government

State-run insurance major Life Insurance Corporation (LIC) has transferred Rs1,634.89 crore to the central government as dividend to its largest shareholder. LIC paid the dividend after distributing 95 per cent of its total surplus as bonus to policyholders.

SK Roy, chairman of LIC, handed over the dividend cheque of Rs1634.89 crore to union finance minister Arun Jaitley in his office on Monday.

LIC generated a total surplus of Rs32,685.21 crore during FY14, up 13.8 per cent from Rs28,727.64 crore reported in the previous fiscal. After distributing 95 per cent of the surplus to policyholders as bonus, the balance of five per cent amounting to Rs1,634.89 crore was paid to the government as its share.

LIC could transfer a higher surplus to the government due to two favourable income-tax refund judgements in the recent past. The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) had ruled in favour of the LIC on 3 April 2013, helping it get a tax refund of Rs4,190.19 crore for assessment years 2008 and 2010.

LIC had also received a refund of Rs7,500 crore for assessment year 2009 sometime ago.

LIC is reported to have paid an advance tax of Rs1,760 crore in the third quarter, against Rs1,536 crore paid a year ago. This has taken its cumulative tax payout to Rs4,410 crore so far this fiscal, up from Rs3,840 crore in the previous year.