Life insurers slide on higher tax fears

Tax uncertainty could continue to weigh on shares of insurance firms, say experts

Shares of insurance companies took a beating on the bourses on Thursday on concerns that higher taxation could impact profitability and valuations.

The fear was triggered after the finance ministry set up a task force to have a re-look at direct taxation.

Shares of HDFC Standard Life Insurance declined the most at 5.4 per cent — its first single-day fall since its listing on Friday. ICICI Prudential Life and SBI Life fell close to four per cent each.

The 2009 Direct Tax Code had proposed to bring the tax paid by life insurance companies on a par with corporate tax rates. While insurance