The notice relates to the claiming of input tax credit against supply of services, which the tax authorities believe are ineligible for such claims. HDFC Life has been advised by its legal and tax counsel that it has a good contestable case.

"This is an industry-wide issue, and the company will be taking appropriate steps in due course to reply to the show cause notice and contest the matter," it said in a regulatory filing.

HDFC Life has already deposited ₹250 crore under protest in this matter.

The company also said that India's insurance regulator has granted approval for transfer of HDFC Life shares owned by HDFC Ltd. to HDFC Bank in view of their proposed amalgamation

Insurance regulator has also approved HDFC Ltd to acquire additional shares in HDFC Life to own more that 50% of its total share capital. Shares of HDFC Life ended 1.9% lower at ₹626.9 apiece on the NSE.