HDFC Life Insurance Company Limited received an Income Tax Order from the Assistant Commissioner of Income Tax, Central Circle 6(2), Mumbai on March 27, 2024. The tax demand and applicable interest has been incorrectly computed by the Department and the Company is in the process of filing a rectification application before the Tax Authority. The Tax demand and interest mentioned in the said Order would be materially reduced post passing of the rectification Order by the Tax Authority.

Nature and details of the action(s) taken, initiated or order(s) passed: Nature - Income Tax Order: Period involved - Assessment Year 2020-21 (Financial year 2019-20): Tax demand: INR 28,830.1 million, Interest: INR 12,957.9 million, Penalty - Nil. The above demand has been calculated considering the corporate tax of 30% (excluding surcharge and cess) instead of applicable special tax rate of 12.5% (excluding surcharge and cess). The Company is in the process of filing rectification application before the Tax Authority with respect to the above.

Post passing of the rectification order, the rectified tax demand shall be approximately INR 12,951.40 million and Interest shall be recomputed accordingly. Allegations: Negative Reserves not considered as part of taxable surplus. Shareholders net investment income classified as`Income from life insurance business' instead of `Income from Other Sources'.

Certain incomes should not be claimed as exempt under Section 10. Contribution from Shareholders' incorrectly claimed as a deduction while computing Shareholders' profits. Proportionate disallowance as per Section 14A read with Rule 8D not made.

Certain marketing and advertising expense in financials considered as admissible expense incorrectly while calculating the taxable surplus in Policyholder's Account. Major issues raised in the assessment order [as stated in Allegations (a) to (e) above] are covered by orders of the Income Tax Appellate Tribunal, Mumbai and Commissioner of Income tax (Appeals) in own case for earlier years which was already disclosed vide disclosure of pending litigations/disputes made on August 14, 2023 and November 9, 2023, respectively. The said order is appealable before the Appellate Authority.

The Company will file its appeal within the specified period.